President Trump is delivering $16 billion more in aid to farmers hurt by his trade policies, an effort to relieve the economic pain among his supporters in rural America.
U.S. Agriculture Secretary Sonny Perdue said the first of three payments is likely to be made in July or August and suggested that U.S. negotiators may be weeks away from settling a bitter trade dispute with China.
The latest bailout comes atop $11 billion in aid Trump provided farmers last year.
Trump, seeking to reduce America’s trade deficit with the rest of the world and with China in particular, has imposed import taxes on foreign steel, aluminum, solar panels and dishwashers and on thousands of Chinese products.
U.S. trading partners have lashed back with retaliatory tariffs of their own, focusing on U.S. agricultural products in a direct shot at the American heartland, where support for Trump runs high.
“The package we’re announcing today will ensure that farmers will not bear the brunt of those trade actions,” Perdue said.
Financial markets buckled Thursday on heightened tensions between the U.S. and China. The Dow Jones industrial average was down more than 400 points in midday trading, but later regained some ground to close the day off 286 points, or 1.1%.
U.S. crude plunged 6% on fears that the trade standoff could knock the global economy out of kilter and kill demand for energy.
Talks between the world’s two biggest economies broke off earlier this month with no resolution to a dispute over Beijing’s aggressive efforts to challenge American technological dominance. The U.S. alleges that China is stealing technology, unfairly subsidizing its own companies and forcing U.S. companies to hand over trade secrets if they want access to the Chinese market.
Trump and Chinese President Xi Jinping are expected to discuss the standoff at a meeting of the Group of 20 major economies in Osaka, Japan, next month.
But briefing reporters on the farm aid package, Perdue said he doubted that “a trade deal could be consummated before” the first payments to farmers in July or August.
In Beijing, China held the door open to resuming talks in the tariff war with Washington but lashed out at limits on access to key technologies that it said might hurt global supply chains.
Foreign Ministry spokesman Lu Kang said China hopes to restart the talks that broke down this month after the U.S. hiked tariffs on $250 billion in Chinese imports, but only if the conditions are deemed fair.
“China is open to the door of dialogue, but sincerity is indispensable to make a consultation meaningful,” Lu said at a regularly scheduled briefing. “A mutually beneficial agreement must be based on mutual respect, equality and mutual benefit.”
Seeking to rally support for its side in the tariff war, Beijing is vehemently protesting the Trump administration’s decision last week to impose controls on exports of computer chips and other key components.
The move, mainly aimed at telecom equipment maker Huawei and other Chinese high-tech companies, will hinder global cooperation in science and technology and has “harmed the vital interests of relevant enterprises and countries,” Lu said.
A spokesman for China’s Commerce Ministry said Washington was “using American national power to suppress Chinese companies.”
This “not only seriously disrupts regular business cooperation between the sides’ enterprises but also seriously threatens the security of the global industrial supply chain,” the spokesman, Gao Feng, told reporters.
The Trump administration has singled out Huawei, accusing it of posing a security threat. As a result, U.S. allies and their companies increasingly have put cooperation with the company on hold.
On Wednesday, Britain’s EE and Vodafone and Japan’s KDDI and Y! Mobile said they were holding off on the launch of Huawei smartphones, including some that can be used on next-generation mobile networks, amid uncertainty about the devices from the world’s No. 2 smartphone maker.
As the trade dispute drags on, battering Chinese manufacturers and raising uncertainty for investors, Beijing has stepped up efforts to sway opinion in its favor both at home and abroad.
That extends even to neighboring countries whose economies are unlikely to be much affected by friction between Beijing and Washington.
Speaking to members of the eight-nation Shanghai Cooperation Organization at a meeting in Kyrgyzstan, Chinese Foreign Minister Wang Yi vowed to match “extreme pressure” from the U.S. with its own measures.
The trade frictions have “aroused great concern from the international community,” Wang said. “I stress to everyone that China’s actions are not just about preserving our own legitimate rights and interests but also to maintain the norms of international relations and safeguard the international free trading system.”
Wang, whose comments Wednesday were posted on the Foreign Ministry’s website, said representatives of the group had expressed “broad support” for China’s position.
A security-oriented group dominated by Moscow and Beijing, the Shanghai Cooperation Organization also includes Kazakhstan, Tajikistan, Uzbekistan, India and Pakistan and several observer states and “dialogue partners.”
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.
They include semiconductors and other crucial inputs needed by fledgling Chinese tech industries.
So far, Beijing has sought to win sympathy and support by burnishing its credentials as a rules-abiding member of the World Trade Organization.
China has hinted it could also leverage its role as the main global supplier of rare earth elements used in smartphones, lightweight magnets, batteries and other components to slap back. It could also target Apple and other companies that rely on Chinese manufacturing and sales.