Treasury Secretary Scott Bessent sent a sharp and surprising response after China levies huge retaliatory tariffs on U.S. exports on Wednesday: “So what?”
The question underscores the Trump administration’s argument that the U.S. prevails in the trade war with China given its level of dependence on U.S. exports.
The United States buys much more goods from China than from the United States. But Beijing's decision to raise penalties on U.S. import taxes may be fined more than Mr. Best's.
U.S. – “American companies that have sold to China and have achieved great success will not be able to do this,” Sean Stein, chairman of the China Business Council, said hours before Trump raised tariffs again.
“The tariffs on the Chinese side and the U.S. cover everything,” Mr Stein added. He said everything from aviation to medical imaging to agriculture would be affected and “trade will slow down.”
According to the Office of the U.S. Trade Representative, the U.S. exported $143.5 billion in goods to China last year and imported $438.9 billion from the country.
China's losses as an export market will bring a particularly difficult economic blow to agricultural workers in many red states, hitting many voters who helped Trump win the presidential election. Mr. Trump raised U.S. tariffs on China even higher Wednesday as he suspended his “countdown” tariffs on other countries. There is little relief for probation as those fear that a protracted trade war with China will remain in touch with the largest export markets.
The first trade war with China lasted from 2018 to 2019, causing billions of dollars in revenue to American farmers. To offset the losses, Mr. Trump distributed $23 billion to a subsidy from a fund created by the Department of Agriculture to stabilize the agricultural sector. Large farm operations and farmers in the South benefited the most, raising concerns about fairness and making some farmers feel cheated.
The soybean industry is one of the most concerned sectors with current tariffs. China is the largest soybean export market in the United States, but when Mr. Trump imposed tariffs on Chinese goods in the first semester, Beijing retaliated by buying soybeans from other countries, including Brazil.
“If it lasts for a long time, we will have a large number of farmers going bankrupt,” said Caleb Ragland, a Kentucky farmer, president of the American Soybean Association. “We are still suffering from scars in the last trade war.”
The American Soybean Association has been urging the Trump administration to reach new trade agreements with China to avoid a long-term trade war.
American corn farmers sell about 2% of their products to China, and the trade struggle is on the verge of margins. They welcome Mr. Trump's moratorium on tariffs that punish other countries, which could lead to retaliation against farmers and other U.S. businesses. But they urged the Trump administration to focus on negotiations that open market access.
Kenneth Hartman Jr., president of the National Corn Growers Association, “Our farmers are sure that our customers at home and abroad will purchase our products in the coming months and years.”
U.S. Trade Representative Jamieson Greer testified before the House Roads and Means Committee and faces problems with Republicans who are nervous about retaliation against other countries and retaliation against U.S. farm exports, which was anxious about the impact of tariffs on Wednesday.
Darin Lahood, a Republican representative from Illinois, said he appreciated what Mr. Trump did to address the long-standing trade barriers, but his voters were worried.
“When I talk to farmers, there's a lot of anxiety, a lot of stress, a lot of uncertainty because when we start a trade war, it's usually the first piece in a trade war,” he said.
Mr. Greer replied: “Almost all countries declare that they will not retaliate”. He added that Indonesia, India and many other countries “are sure that we have no revenge” and that some countries (such as Vietnam) unilaterally offer unilaterally lowering tariffs on American agricultural products. Mr Greer did not mention that Europe announced retaliation measures on Wednesday or that Canada had retaliated against previous tariffs.
Mr. Bessent downplayed the impact of the Chinese response Wednesday morning and said on Fox Business Network that U.S. exports to China are relatively small.
“China can raise tariffs, but what?” Mr. Bessent said he owns up to $25 million in North Dakota farmland.
Retaliation could force the Trump administration to rescue American farmers who were reinstated to the president’s first term.
Agriculture secretary Brooke Rollins said Wednesday that such a relief plan is being considered, “everything is on the table.”
During Thursday's White House cabinet meeting, Ms. Rollins noted that farmers and ranchers struggled due to inflation and were concerned about uncertainty about trade, but they supported Mr. Trump's economic agenda.
“You use tariffs to make sure we raise and put America first, and no one is better than our farmers and ranchers,” Ms. Rollins said. “We are in a time of uncertainty and they know your vision will bring us into a prosperous era.”
Mr. Trump had nothing to do with China on Thursday, but the president expressed general optimism about economic relations.
Asked about the potential of a deal with China, Mr. Trump said he hoped “we will end up doing something very favorable for both countries.”
The president initially praised the trade deal he reached with China in his first term, which was a success, but China ultimately failed to deliver on its promise to buy a large amount of American agricultural products. At the same time, almost all relevant taxes involved all relevant taxes collected by the United States during the trade war were used to provide relief to the agricultural industry.
Farmers usually boycott government handouts, but Mr. Lagran of the American Soybean Association said federal relief was necessary in this case.
“If we continue to be used as a negotiation tool and we will be the sacrifice lamb on behalf of the big picture, then we will have to have an economic plan to help us keep the lights,” he said.
Tony Romm Contribution Report
