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Trump trade war troubles

I have three things to say about this.

There’s a Chinese proverb: Sow melons, reap melons. Sow beans, reap beans.

In other words, expect tit for tat.

President Donald Trump — and by extension many of the nation’s farmers — is seeing that lesson in action after he launched a bevy of tariffs against China on Friday, prompting the People’s Republic to retaliate with its own tariffs on imports from the United States. Among those American goods are some key Texas exports, including cotton, corn and sorghum. Some of the Chinese goods targeted in Trump’s tariffs are vital parts for Texas’ agriculture industry, such as livestock equipment.

“No question, it’s going to hurt,” said Gene Hall, a spokesperson for the Texas Farm Bureau.

[…]

“You couldn’t pick a worse time for agriculture to be in a trade dispute,” said Hall, the Texas Farm Bureau spokesperson, pointing to a 50 percent decline in agricultural income since 2013. He said the farm bureau always supports negotiating trade disputes over gratuitous tariffs — but that many farmers hope the president’s actions will force China, which has historically acted in ways that have harmed Texas agriculture, to the negotiating table.

“There is some patience in the agricultural community for what the president’s doing, but there is some angst as well,” Hall said.

1. Clearly, the well of “Trump Supporters Continue To Support Trump Even Though He Keeps Doing Things They Don’t Like” stories has not yet run dry.

2. I’ve been keeping an eye on Trump’s approval rating among Republicans for signs that they may be less engaged than usual in November. While Democrats are super enthusiastic, Republicans have stuck with their man, which if nothing else has kept the bottom from falling out. I wonder sometimes if Trump’s high levels of approval among Republicans is in part a sign that the GOP has shrunk, so that the disapprovers are mostly not calling themselves Republicans any more, but I have no way to know that. I feel pretty confident saying that Dems will turn out in stronger numbers than usual this year. I have no idea yet where turnout will be on the R side. I’m still hoping for something like 2006, but there’s no real evidence of that at this time.

3. Gotta say, after all the harm that has been inflicted on so many people by Trump, the fact that his staunchest supporters are feeling the pain as well gives me no small measure of grim satisfaction. Maybe if they feel enough of it, we’ll finally be able to get the country back on the right track.

The border tax effect on your food

You’re gonna pay more. Any questions?

The idea of a tariff on Mexican imports or a radical change to the North American Free Trade Agreement — another Trump promise — worries many Texas agriculture industry leaders, who say it is in the state’s best interest to continue fostering a positive trade relationship with Mexico rather than imposing tariffs on their imports.

Mexico is the state’s largest trade partner, overshadowing its two closest competitors, China and Canada, by billions of dollars. According to U.S. Census data, in 2015 Mexico imported more than $92 billion worth of goods from Texas, while Texas imported more $84 billion worth of goods from Mexico.

Luis Ribera, an associate professor at Texas A&M University’s Center for North American Studies, said any large-scale tariff on Mexican goods would hurt American consumers more than anyone else by making everything from avocados to tomatoes more expensive for Americans — or compelling Mexico to buy Texas-produced staples like wheat, beef and corn from other countries.

“We’re going to lose that market or (if we don’t) lose it, we’re going to get tariffs on the products that we send to Mexico,” Ribera said. “So it’s going to make our products less competitive when we compete with the rest of the world.”

Steelee Fischbacher, director of policy and marketing at the Texas Wheat Producers Board and Association, said a potential Mexican tax worries the Texas wheat industry because Mexico is the largest importer of hard red winter wheat, the top class of wheat produced in the state. In 2011, the U.S. exported 2.4 million metric tons of hard wheat to Mexico, according to a Texas A&M study.

“Being our number one customer, it’s a very critical market for us, especially in a time where we have low wheat prices,” she said, adding that Mexico has plenty of other potential trading partners for wheat such as Argentina, Canada and Australia.

This is Econ 101 stuff here, simple enough for even a bad high school student to grasp. And given his support for Dear Leader, it’s another way in which Dan Patrick is bad for Texas business and Texas’ economy. How much more evidence do you need, Texas Association of Business?

Dan Patrick and the wall tax

Hey, you know who’s going to pay for Dear Leader’s wall? You and me and everyone else in the country.

The Trump administration sparked widespread surprise Thursday by announcing it intended to implement a 20 percent tax on Mexican imports to pay for a coming border wall — followed by extreme confusion when it appeared to walk back the statement later that afternoon.

White House Press Secretary Sean Spicer made the initial announcement Thursday afternoon aboard Air Force One, as President Trump returned from a meeting with House Republicans in Philadelphia.

“Right now, our country’s policy is to tax exports and let imports flow freely in, which is ridiculous,” he told reporters. “By [imposing the tax], we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding.”

Spicer further indicated that the administration has “been in close contact with both houses” of Congress.

“It clearly provides the funding, and does so in a way that the American taxpayer is wholly respected,” he added.

Later on Thursday, however, White House officials sought to characterize the tariff as one of several options to fund the wall, according to multiple news reports.

If passed by Congress, such a move is all but certain to have a dramatic affect on the U.S. economy and particularly in Texas, which imports far more from Mexico than from any other country, according to U.S. Census data.

Hmm, so that would be bad for the Texas economy. What does Dan Patrick think about that?

Many business and political leaders in trade-dependent Texas already have expressed reservations about the proposed import tax proposal itself, even without linking it to the wall.

Gov. Greg Abbott, who has championed increased trade with Texas’ southern neighbor since he became governor a year ago, had no immediate comment on Spicer’s suggestion.

Lt. Gov. Dan Patrick, an outspoken supporter of the wall who served as Trump’s campaign chairman in Texas, told Fox News that he was “not too concerned” about any adverse impact of such a tax. He suggested the proposal could be “the first warning shot across the bow” fired by Trump, and that the tax could end up being something less.

It’s only a little tax. You won’t even notice it. Also, of course Greg Abbott had no comment. I don’t know why anyone bothers to ask any more.

Now here’s a statement I got from the Texas Association of Business about this idea:

The following statement may be attributed to Texas Association of Business President Chris Wallace.

“Texas’ number one trading partner by far is Mexico, and imposing a 20 percent tax on Mexican imports to fund a border wall would hurt the Texas economy. This proposal could mean a loss of jobs and a hit to state tax revenues. We look forward to working with our Texas congressional delegation and our TAB members to address this proposal and I would encourage our state leaders to make the economic ramifications of this proposal known.”

Dear Chris Wallace and TAB: Dan Patrick cares way more about his pet ideological obsessions than he does about your interests. What are you going to do about that? The Rivard Report and RG Ratcliffe have more.

(Patrick has since said in a Facebook comment about his TV appearance discussing the wall tax that he is not concerned about it because it won’t happen, and he doesn’t actually support it. Which isn’t what he said on TV, and doesn’t say that he would oppose it if it does become a thing that might happen. I think that’s pretty wishy-washy, but in the interests of accuracy, there you have it.)