White House economic adviser Larry Kudlow said a plan by the Trump administration to pay as much as $12 billion in relief to U.S. farmers hurt by a burgeoning trade dispute is a stop-gap proposal and doesn’t signal a willingness to make a habit of aid programs.
“What we’ve put on the board is what I think is a temporary assistance measure, I don’t think it’s going to get near to $12 billion,” Kudlow said during an interview on “CBS This Morning” on Wednesday. “Nobody’s really thrilled about this. We’re just trying to protect American agriculture from some of the unfair trading practices.”
The proposal was panned even by some Republicans in Congress who said it failed to address the underlying problem of the White House’s own trade policies. Extra farm aid would be a balm to producers who are seeing prices drop and inventories rise because of disputes with China, Canada and other trade partners who are significant purchasers of U.S. pork, soybeans and other products.
While the overall economic impact of tariffs on steel and aluminum and Chinese imports already implemented by President Donald Trump is expected to be muted, American industry has warned it could hurt their earnings and lead to higher prices for consumers. On Wednesday, General Motors Co. cut its profit forecast this year on surging metals prices.
Automakers like GM are also warning Trump to drop plans to possibly impose 20 percent tariffs on vehicle imports on the grounds of protecting national security.
Earlier on Wednesday, Trump tore into his critics on trade, saying that “people snipping at your heels during a negotiation” undercut his administration’s ability to negotiate an agreement that is more fair to the American economy.
Kudlow said the attempt to shore up markets is a reaction to a “broken” system of world trade that has worked against the U.S. in the past. He called for patience in allowing the U.S. to achieve reciprocity in trade.
“No one is thrilled with subsidies, I get that,” Kudlow said. “On the other hand, we need a backstop for our patriotic farmers who have been hurt.”
Copyright 2018, Bloomberg