Chinese President Xi Jinping has a luxury not afforded to U.S. President Donald Trump. Xi does not fear his chances at reelection, and he need not worry about critical Chinese media and therefore retribution from voters.
Trump, however, must deal with all three as he tries to maneuver through the trade war between the U.S. and China and which has American farmers rightfully on edge.
But even with that advantage, Xi has made a great miscalculation that became ever more apparent last week: Fighting American farmers and producers – who have become Xi’s target – does not divide America so much as it unites it.
Thursday, Trump announced a $16 billion aid package that will be used for commodity purchases as well as to make direct payments to producers. The payments will begin in July and August. An aid package last year saw $12 billion distributed to help producers.
The latest aid comes at a critical time, as farmers and producers worry about falling prices and their own mounting debt. In a report from The Washington Post, Chapter 12 bankruptcies – which allow farmers to restructure finances to avoid foreclosure – have risen, and especially in areas like the Upper Midwest. And the price of the all-important soybean has dropped to half of what it was in 2012.
This most recent aid package is necessary and will help keep producers afloat as the trade war continues. It’s no solution, of course, but simply a bandage on a wound that needed care.
Mostly, we see it as a message to China that attacking American farmers and producers – which seems to be China’s intent – won’t result in an easy victory, since agriculture generally scores bipartisan support in U.S. politics. Even Democratic Senate leader Chuck Schumer, earlier this month, urged Trump to “hang tough on China.”
“Strength,” Schumer said, “is the only way to win with China.”
So if China feels that putting steep tariffs on agriculture would force the hand of Trump – who scores big points in farm states – we see it a grand miscalculation on the part of President Xi. Trump is not desperate to make a deal, as China may suspect, and he’s backed up by leaders from both political parties. China also has apparently misconstrued how frustrated the U.S. is with the countries’ past trade agreements, which many Americans view as unfair and unhealthy for the U.S. economy.
Meanwhile, according to the news agency Bloomberg, China’s economy appears to be slowing at a faster pace than the U.S. economy. Bloomberg reports that China’s industrial output, retail sales and investment all slowed in April by more than economists had predicted.
This trade war is ugly, and we lament what it has done to farmers’ pocketbooks and confidence. The aid package will help, but only for a while. It certainly is not the answer, but only a temporary solution.
However, we – like the president, most Republicans and even some Democrats – believe that if the U.S. can resolve traditional inequities in trade with China, the nation will be better for it.