The Latest: Ag Secretary doesn’t expect deal by late summer
The Associated Press
May 23, 2019 10:03 AM
A worker browses her smartphone inside a shop selling shoes in Beijing, Thursday, May 23, 2019. An escalating trade war between the U.S. and China could mean higher prices on a broad array of products from toys to clothing. But some retailers will be less equipped to handle the pain than others, leaving consumers to carry the load.
The Latest on trade tensions between the United States and China (all times local):
U.S. Agriculture Secretary Sonny Perdue said the U.S. and China probably won’t reach a trade deal by July or August, when the government will likely make its first aid payments to farmers from a new $16 billion support program.
Perdue said Thursday that “It would be very difficult to understand how a trade deal could be consummated before that first payment.” He noted that President Donald Trump will likely meet with China’s President Xi Jingping in late June on the sidelines of an international summit. Currently there aren’t any plans for talks to resume before then.
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Perdue and other officials said that an agreement could happen before the second of three payments are made in the late fall.
President Donald Trump is providing another $16 billion in aid to U.S. farmers hurt by his trade policies.
Agriculture Secretary Sonny Perdue told Fox Business Network’s “Mornings with Maria” that Trump has “authorized the $16 billion facilitation program.” Last year, the Trump administration delivered farmers an $11 billion bailout to offset the costs of his trade conflicts with China and other U.S. trading partners.
Trump has imposed tariffs on foreign steel and aluminum and thousands of Chinese products. Foreign countries have lashed back with retaliatory tariffs. They have focused on U.S. agricultural exports in a direct shot at Trump’s supporters in rural America.
Best Buy’s CEO is warning that prices will rise if the U.S. applies another round of tariffs on Chinese goods.
Hubert Joly said after the company posted quarterly earnings Thursday that the electronics chain has largely avoided raising prices with a few exceptions, like washing machines.
Joly says it’s too early to know what might cost more if the trade war escalates since it’s not yet known which goods will be on the tariff list.
Joly is just the latest U.S. executive to warn about the potential for rising prices in a trade war.
The typical American shopper has been left largely unscathed by the first several rounds of tariffs that the U.S. imposed on China because they mostly focused on industrial and agricultural products. But that began to change when a 25% tariff on goods like furniture went into effect two weeks ago.
This week, major shoe companies like Nike and Adidas said the Trump administration’s proposed actions will add $7 billion in additional costs for customers every year.
Stocks are sinking sharply in morning trading on Wall Street as investors’ worries about the U.S.-China trade dispute deepen.
The Dow Jones Industrial Average fell as many as 406 points shortly after trading began, before paring its drop to about 334 points, or 1.3%. The S&P 500 and Nasdaq composite indexes were down by similar degrees.
Energy stocks led the way lower after the price of benchmark U.S. oil sank more than 5% to drop below $59 per barrel. Technology and industrial stocks were also hit hard, as investors see their profits in particular getting hit in the crossfire of the global trade war. These companies often have many suppliers and customers abroad.
Investors fled to the safety of bonds. The yield on the 10 year Treasury slipped to 2.32%, the lowest level in more than a year and down from 2.39% late Wednesday.
China’s foreign ministry says the country is open to resuming trade talks with the U.S., but sincerity and mutual respect are needed. Spokesman Lu Kang said Thursday that China hopes for a restart to talks that broke down earlier this month after the U.S. hiked tariffs on $250 billion in Chinese imports.
Lu said, “China is open to the door of dialogue, but sincerity is indispensable to make a consultation meaningful. A mutually beneficial agreement must be based on mutual respect, equality and mutual benefit.”
He reiterated China’s criticism of U.S. efforts to restrict commercial cooperation with equipment maker Huawei and other Chinese high-tech firms. He said Washington has “seriously affected the development and cooperation of global science and technology, and has also harmed the vital interests of relevant enterprises and countries.”
China is seeking to support from some of its Asian neighbors and Russia in its escalating tariff fight with the U.S.
Speaking Wednesday at a meeting of the Shanghai Cooperation Organization in Kyrgyzstan, Foreign Minister Wang Yi said representatives of the eight-nation grouping had expressed “broad support” for China’s position.
Wang reiterated China’s stance that it would never accept unequal trading arrangements. He said Beijing will match “extreme pressure” from the U.S. with its own measures.
Beijing has already responded to Trump’s tariff hikes on $250 billion of Chinese imports by slapping penalties on $110 billion of American goods. Based on last year’s trade, that leaves about $45 billion in imports from the U.S.
That includes semiconductors and other critical inputs needed by fledgling Chinese tech industries.