Trump's Tariff Shell Game And China's Reaction

Very Stable Genius and noted dealmaker Donald "Not Exonerated" Trump is floating his foolproof plan to bail out farmers from the effects of his trade war with China:

...Trump via Twitter on Friday indicated that the U.S. could use some of the money from tariffs on Chinese goods to buy $15 billion worth of agricultural products from American farmers, or “far more than China buys now.” The president also said U.S. agricultural products could be shopped “to poor & starving countries in the form of humanitarian assistance.”

So, U.S. taxpayers will see higher prices for goods imported from China, while Trump tries to shelter those who would be hurt by China retaliating for his tariffs with direct subsidies.  Sounds like a plan only a lifelong grifter would come up with.  Also, as former Agriculture Secretary Tom Vilsack points out, those "poor & starving countries" where Trump thinks our agricultural products could be dumped would have issues, not the least of which being,

“They would prefer to take cash because they don’t want to disrupt their own agricultural economy by having foreign crops come in and displace domestically produced crops.”

This, and the difficulties of carving out appropriations for a $15 billion bailout, might have been more evident had any attention been paid to people who actually know stuff, but are now exiting government:

Economists in the Agriculture Department's research branch say the Trump administration is retaliating against them for publishing reports that shed negative light on White House policies, spurring an exodus that included six of them quitting the department on a single day in late April.

The Economic Research Service — a source of closely read reports on farm income and other topics that can shape federal policy, planting decisions and commodity markets — has run afoul of Agriculture Secretary Sonny Perdue with its findings on how farmers have been financially harmed by President Donald Trump's trade feuds, the Republican tax code rewrite and other sensitive issues, according to current and former agency employees.

Of course, China (with whom we do have serious trade issues) is not taking Trump's bull- shitter- in- a- China- shop routine lying down, imposing a 25% tariff on over 2,500 U.S. products and a 20% tariff on over 1,000 more, worth approximately $60 billion:

It includes food products, such as meat, honey, bamboo, frozen peas and spinach, roasted coffee, green teas, various oils, fruit juice and stuffed pasta.

Alcoholic drinks such as beer, wine and gin are also on the list.

Many chemicals are listed, as is manufacturing equipment such as vacuum moulding, wire-drawing and cable-making machines.

On the consumer side, televisions, headphones, DVD players, cameras, telescopes, alarm clocks, instruments such as pianos, buttons, and fishing rods will now be much pricier.

There’s also a new 20% tariff list covering over 1,000 products.

This 20% tariff will hit also hit food (frozen strawberries, shelled peanuts), chemicals, books, some steel products, copper pipes, batteries and power supplies, photography equipment, brushes..... and consumer products such as golf clubs, bowling pins, roller skates, pens, pencils and antiques.

To Americans involved in these industries who will be headed for harder times because their export market to China is drying up, please thank the loser who doesn't understand how tariffs work;  and for those of you watching the stock market and your IRAs, a quick 10% loss is quite possible. The Trump economy!

(Photo:  Wile E. Coyote's got nothing on him!)