Trump says Chinese demand after 'greatest deal ever made' may overwhelm US farmers

Fox Business News ^ | October 12, 2019 | Megan Henney

[2ndDivisionVet]

President Trump lauded the partial trade agreement he struck with China this week, calling it the “greatest and best” deal in a tweet Saturday morning.

As part of the deal -- which Trump and President Xi Jinping could sign as soon as next month -- China agreed to raise its agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion and to make certain reforms on intellectual property and financial services. The U.S. will not raise tariffs on Oct. 15 from 25 percent to 30 percent.

It’s still unclear whether Trump plans to halt another round of tariffs that are set to take effect on Dec. 15.

“The deal I just made with China is, by far, the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country,” he wrote. “In fact, there is a question as to whether or not this much product can be produced? Our farmers will figure it out. Thank you China!”

[2ndDivisionVet]

That clinches it! He just won re-election! That's a lot of pigs, wheat and soybeans.

[Texas Eagle]

Finally! Let other countries subsidize our farmers instead of American taxpayers. Oh. Wait. No word on whether or not we’ll continue to subsidize farmers. I guess that means we will.

[granada]

Viva la soybean!

[DoughtyOne]

Notice how they toss in the mention of making certain reforms on intellectual property and financial services, as if that’s a small side issue.

That in and of itself was worth fixing in it’s own rights.

I don’t know if they’re just talking about movie knock-offs, or if business intellectual rights were also included. If both, that’s a significant fix. Of course China has already lifted almost every discovery we’ve made in the last 100 years anyway.

[Rebelbase]

Good money to be made in selling low grade sweet potatoes to the chicom dog food companies also.

[Kozy]

China is in a famine. They have a swine flu that is killing off they main staple, pork. If Xi can’t feed the people will riot and fell his government.

[granada]

A win-win for Huawei and soybeans

[puppypusher]

Some reason I’m very Leary of any deal made by the Chicoms especially if I were a farmer or Rancher.

To take a gamble too purchase heavy combines and other farming equipment is risky when your partner can kill that contract at any time.

Be careful farmers before you take that bet.

[stanne]

“Of course China has already lifted almost every discovery we’ve made in the last 100 years anyway.”

One wonders whether this deal had leverage due to the cut-off of gravy-train, secret-selling clintonobamabidenats

[9YearLurker]

The chances of the Chinese ever buying what they promise are very slim. Meanwhile the one-way tariffs and IP theft continue apace.

[Bratch]

Analysis – President Trump and Vice Premier Liu He Announce “Phase One” Trade Agreement – Video

Posted on October 11, 2019 by sundance

Lots of dragon-dancing with a very hungry panda.

President Trump, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Mnuchin gathered with their Chinese counterparts in the Oval Office for a lengthy  announcement of “phase-one” of a U.S-China trade agreement.  Vice-Premier Liu He leads the Chinese delegation.  [No point sheet on USTR website yet]  According to the presser:

Phase One has reached ‘agreement in principle‘, and includes: Intellectual Property issues; Banking and Financial Services to include currency devaluation; and major agricultural purchases ($50 billion +).  There will be several phases, and each phase will have an individually tailored enforcement mechanism. [Note: this approach sounds similar to the ‘six sectors and stages’ USTR Lighthizer discussed in March 2019.]

The Phase One agreement details still have to be put on paper over the next five to six weeks.  The U.S. and China are hopeful to have ‘phase one‘ complete by December. In exchange for current AG purchase commitments, and as an act of good faith while phase-one is finalized, the U.S. will suspend the tariff rate increases scheduled to take effect on October 15th. The tariff increase from 25% to 30% has been ‘suspended‘.

The scheduled U.S. tariff increases for December are still planned; however, they will be assessed as part of the ongoing negotiations.  Meanwhile, touchy issues like tech company Hauwei, 5G, telecom and the Chinese firms on the U.S. blocked “entity list” (ie. trade ‘blacklist’) are not part of the discussions.  Those issues fall under U.S. National Security and will not be part of any ongoing trade negotiations.

[Video Below]

President Trump Meets with the Vice Premier of the People's Republic of China

Overall I wouldn’t read too much more into this than appears on the surface.

China needs to buy food.  There are a limited number of export markets that can generate the scale of agricultural imports that China demands.  A hungry Chinese people only make the issues in/around Hong Kong worse.   Pandas can become very aggressive when hungry….  China needs to buy food.

President Trump wants to sell food to help the U.S. farmers; mostly operating under BIG AG multinational contracts (ie. contract farming).   The scale of Chinese purchases is too significant to overlook….  So Trump trades the suspension of a 5% tariff to gain $50 billion in farm purchases.  That’s most of the visible picture on this deal.

That said…. as USTR Lighthizer has previously stated, the issues of consequence are going to be in the enforcement mechanisms.  An agreement on IP and Banking/Financial Services is great, but the part that matters is the enforcement mechanism.  I wouldn’t put too much faith in Phase-1 being successful until we see some indication that China will acquiesce to U.S. enforcement provisions.

If you say: “China will never comply with U.S. enforcement”… well, I wouldn’t disagree; nor would USTR Lighthizer… he’s admitted as such.  So is a deal really possible?  Too soon to know, and too few details.

Panda gets food. Farmers get sales.  That’s the only known takeaway so far.

All other pro -vs- con analysis (predictions and projections) are for domestic audiences, politics and stock market consumption.  I still think an actual deal is unlikely.

Right now we’ve got happy pandas and happy farmers…. everything else is TBD.

(LINK)

[Amish with an attitude]

But what has been done to curb intellectual property theft by the Chinese?

[granada]

“China is in a famine. They have a swine flu that is killing off they main staple, pork. If Xi can’t feed the people will riot and fell his government.”

........
Lol.
If it was true, NBA would have already barked at China.

[clearcarbon]

"there is a question as to whether or not this much product can be produced?

Can't help wondering if that will drive up the cost of groceries.

[ImJustAnotherOkie]

We all knew China has a hell of a problem and DJT knew it too.

[Mariner]

This is folly.

The US should not be trading with China.

[Balding_Eagle]

Oh, wait.....you have no idea of how farm subsidies are calculated do you.

[Kozy]

Yes, it is true. There is a swine flu that has wiped out 25% of the swine herds in China. China has no choice but to bend their knee to Trump.

[FatherofFive]

And now let’s take the corn out of fuel, and sell it to China

[ImJustAnotherOkie]

Now is time to move on Ethanol !