The Latest: China tariffs to cost average US household $831
NEW YORK (AP) — The Latest on trade tensions between the United States and China (all times local):
The New York Federal Reserve estimates that the Trump administration's latest round of tariff hikes on Chinese goods will cost the typical U.S. household $831 a year.
President Donald Trump has imposed 25% tariffs on $250 billion in Chinese imports. The tariffs were raised from 10% after trade talks stalled earlier this month.
Economists at the New York Fed wrote that rather than buy the tariff-burdened Chinese goods, U.S. companies are likely to purchase from suppliers from other countries. But those goods are still likely to cost more than pre-tariff Chinese goods.
"In sum, according to our estimates, these higher tariffs are likely to create large economic distortions and reduce U.S. tariff revenues," the New York Fed economists wrote.
Iowa Soybean Association President Lindsay Greiner says farmers generally don't like taking aid, but the government needed to step in after trade talks with China fell apart.
Greiner said Thursday that the aid will be especially important for younger farmers who had to take on significant debt to get into the business.
He added that "there are some details to be worked out, but it looks good."
Before talks fell apart, Greiner said he was optimistic there was going to be a negotiated settlement. Now he's not sure how long it will take to resolve the trade dispute.
"I'm not optimistic. I think it's going to take a long time to get back to the table."
President Donald Trump, whose administration has singled out Chinese telecoms equipment maker Huawei as posing a threat to U.S. national security, is suggesting that he may be open to making it an issue in the stalled trade negotiations between the U.S. and China.
Responding to a question from a reporter at the White House, Trump said Huawei is "very dangerous." But he added, "If we made a deal, I can imagine Huawei being included in some form of a trade deal." Asked specifically what that would look like, he replied, "It would look very good for us, I can tell you that."
The U.S.-China trade dispute has festered after the Trump administration hiked tariffs on $250 billion in Chinese imports and Beijing retaliated with increased tariffs on $60 billion in U.S. goods.
As a result of U.S. efforts to restrict commercial cooperation with Huawei, U.S. allies and their companies increasingly have put cooperation with the Chinese giant on hold.
The American Soybean Association says the aid the Trump Administration announced Thursday was necessary, but farmers hope trade talks will continue.
"We just don't want the administration to use this as a reason not to be aggressive in talks," said Bill Gordon, vice president of the American Soybean Association.
Gordon farms about 2,000 acres with his dad near Worthington, Minnesota. He says he didn't change his planting plants this year because of the trade dispute.
Gordon said he'll want to see how the Agriculture Department plans to distribute the aid among farmers, but he appreciates having it even if the details aren't perfect.
"This helps and is needed in rural America right now," Gordon said.
The Illinois Corn Growers Association praised President Donald Trump for announcing another round of aid for farmers who have been affected by the trade dispute.
The USDA announced Thursday that up to $16 billion in payments will be provided to farmers this year, but it didn't release the payment rates for each crop.
Illinois Corn Growers Association President Ted Mottaz, a farmer from Elmwood, Illinois, says delaying that payment information will simplify things for farmers who are still making final decisions about what to plant.
The wet spring and flooding along the Missouri River and in other areas has delayed planting in places.
Mottaz said, "As we move toward turning the calendar from May to June, the decisions about what to plant and when are complicated enough. Adding a specific monetary figure in a trade-aid payment to the mix is a variable that likely would cause significant market implications. We have enough of that as it is."
U.S. Agriculture Secretary Sonny Perdue said the U.S. and China probably won't reach a trade deal by July or August, when the government will likely make its first aid payments to farmers from a new $16 billion support program.
Perdue said Thursday that "It would be very difficult to understand how a trade deal could be consummated before that first payment." He noted that President Donald Trump will likely meet with China's President Xi Jingping in late June on the sidelines of an international summit. Currently there aren't any plans for talks to resume before then.
Perdue and other officials said that an agreement could happen before the second of three payments are made in the late fall.
President Donald Trump is providing another $16 billion in aid to U.S. farmers hurt by his trade policies.
Agriculture Secretary Sonny Perdue told Fox Business Network's "Mornings with Maria" that Trump has "authorized the $16 billion facilitation program." Last year, the Trump administration delivered farmers an $11 billion bailout to offset the costs of his trade conflicts with China and other U.S. trading partners.
Trump has imposed tariffs on foreign steel and aluminum and thousands of Chinese products. Foreign countries have lashed back with retaliatory tariffs. They have focused on U.S. agricultural exports in a direct shot at Trump's supporters in rural America.
Best Buy's CEO is warning that prices will rise if the U.S. applies another round of tariffs on Chinese goods.
Hubert Joly said after the company posted quarterly earnings Thursday that the electronics chain has largely avoided raising prices with a few exceptions, like washing machines.
Joly says it's too early to know what might cost more if the trade war escalates since it's not yet known which goods will be on the tariff list.
Joly is just the latest U.S. executive to warn about the potential for rising prices in a trade war.
The typical American shopper has been left largely unscathed by the first several rounds of tariffs that the U.S. imposed on China because they mostly focused on industrial and agricultural products. But that began to change when a 25% tariff on goods like furniture went into effect two weeks ago.
This week, major shoe companies like Nike and Adidas said the Trump administration's proposed actions will add $7 billion in additional costs for customers every year.
Stocks are sinking sharply in morning trading on Wall Street as investors' worries about the U.S.-China trade dispute deepen.
The Dow Jones Industrial Average fell as many as 406 points shortly after trading began, before paring its drop to about 334 points, or 1.3%. The S&P 500 and Nasdaq composite indexes were down by similar degrees.
Energy stocks led the way lower after the price of benchmark U.S. oil sank more than 5% to drop below $59 per barrel. Technology and industrial stocks were also hit hard, as investors see their profits in particular getting hit in the crossfire of the global trade war. These companies often have many suppliers and customers abroad.
Investors fled to the safety of bonds. The yield on the 10 year Treasury slipped to 2.32%, the lowest level in more than a year and down from 2.39% late Wednesday.
China's foreign ministry says the country is open to resuming trade talks with the U.S., but sincerity and mutual respect are needed. Spokesman Lu Kang said Thursday that China hopes for a restart to talks that broke down earlier this month after the U.S. hiked tariffs on $250 billion in Chinese imports.
Lu said, "China is open to the door of dialogue, but sincerity is indispensable to make a consultation meaningful. A mutually beneficial agreement must be based on mutual respect, equality and mutual benefit."
He reiterated China's criticism of U.S. efforts to restrict commercial cooperation with equipment maker Huawei and other Chinese high-tech firms. He said Washington has "seriously affected the development and cooperation of global science and technology, and has also harmed the vital interests of relevant enterprises and countries."
China is seeking to support from some of its Asian neighbors and Russia in its escalating tariff fight with the U.S.
Speaking Wednesday at a meeting of the Shanghai Cooperation Organization in Kyrgyzstan, Foreign Minister Wang Yi said representatives of the eight-nation grouping had expressed "broad support" for China's position.
Wang reiterated China's stance that it would never accept unequal trading arrangements. He said Beijing will match "extreme pressure" from the U.S. with its own measures.
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.
That includes semiconductors and other critical inputs needed by fledgling Chinese tech industries.