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Trump hails paydirt for farmers from his China and USMCA deals

Bloomberg logoBloomberg 1/20/2020 Justin Sink

President Donald Trump championed a pair of trade victories at a farm convention Sunday in Austin, Texas.

“The two momentous trade deals we completed last week are just the beginning of a really incredible story,” Trump said in a speech to the American Farm Bureau Federation’s annual meeting.

Earlier, tweeting as he prepared to travel to Texas from Florida, the president said farmers “hit ‘paydirt’ with our incredible new Trade Deals.”

Related video: Trade Deal Brings Relief, but There Are Skeptics (provided by The Wall Street Journal)

Trump is hoping that his “phase one” deal with China -- finalized in a White House signing ceremony last week -- and a renegotiated pact governing trade with Canada and Mexico that the Senate passed on Jan. 16 can buoy him with farmers, who have borne the brunt of the president’s trade wars.

Under the deal negotiated with Beijing, China pledged to buy at least $32 billion in additional U.S. agricultural products over the next two years. The Chinese said they would “strive” for another $10 billion in agricultural purchases, but warned those sales would be dictated by market demands.

Trump’s speech came two days before the formal opening of the Senate trial to decide whether he should be removed from office following the House vote in December to impeach him -- a fact that didn’t escape him on Sunday.

Trump’s China Deal Is His Hedge Against Impeachment Damage

“We’re achieving what no administration has ever achieved before. And what do I get out of it? I get impeached,” Trump said.

While Washington and Beijing have inked their trade pact, China hasn’t specified how much of each American product it will import, and it’s not clear that the deal will substantially exceed agricultural purchases the country was making before the trade war began. Prices of commodities like soybeans, wheat and corn have remained relatively flat in the aftermath of the deal, suggesting traders don’t see an imminent surge in purchases.

“Without more concrete details, we are deeply concerned that all of this pain may not have been worth it,” the National Farmers Union, which represents almost 200,000 American farmers, said in a statement. “Given the numerous deals that have been reached and then breached in the past two years, we are also skeptical.”

Bankruptcies Up

Farm bankruptcies surged late last year to their highest levels since 2011, largely clustered in Midwestern states crucial to the president’s re-election. Still, Trump has argued that subsidies offered by the Agriculture Department -- totaling around $28 billion over two years -- helped blunt the impact of the trade war on farms. Nearly 40% of last year’s projected farm profit came from trade aid, disaster assistance, federal subsidies and insurance payments, according to a report released by the farm organization hosting the president.

“To defend our farmers I authorized $28 billion,” Trump said. “We get them to the small farmers, we get them to everybody. If it’s not, call me directly and I’ll call Sonny” (Agriculture Secretary Perdue) and give him hell.”

The final installment of the aid is coming “very quickly,” Trump added.

Water Rights

The president argued additional benefits would be realized under his Nafta reboot, the U.S.-Mexico-Canada Agreement, which improves market access for American dairy, poultry and eggs in the two neighboring countries. The revised trade agreement passed the Senate in a bipartisan 89-10 vote and Trump is expected to sign it.

Trump said he backs having water rights reside with the states, not the federal government, as the administration moves to finalize a three-year effort to scrap an Obama-era water rule unpopular with many farmers.

“As long as I’m president, America will never micromanage American waters,” he said. Perdue, introducing Trump, said WOTUS -- the Waters of the U.S. Rule -- “is no more.”

The president’s appearance at the conference is his third in as many years, underscoring the political importance the White House places on the nation’s approximately 3 million farmers. A poll released last week from Reuters and Ipsos suggests the China trade deal has buoyed the president’s standing with farmers, an influential voting block in states like Pennsylvania, Wisconsin, Michigan and Minnesota that Trump’s Democratic challengers will likely need to win later this year in order to take back the White House.

The survey found that 49% of those who said they or an immediate family member worked in agriculture supported the president’s farm policies, while 40% disapproved. That’s a reversal from September, when 45% disapproved of Trump’s approach and just 43% approved.

With assistance from Mike Dorning.

© Seth Perlman / AP  

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