The Trump administration is prepping its initial $4.7 billion bailout to farmers hit by Donald Trump’s trade war with China. Around $3.6 billion of the money will go to soybean farmers, since China has been the top export destination for their product, but corn, cotton, dairy, hogs, sorghum, and wheat farmers are also eligible to apply for the assistance beginning on September 4.

Even from farmers, the reviews are mixed:

“Right now, farmers are hurting, and this aid will allow a momentary reprieve,” said [Minnesota Soybean Growers Association] President Michael Petefish. “Unfortunately, if this trade war continues much longer, this aid package will feel less like a Band-Aid, and more like a reminder of the trade relationships we lost and must rebuild.”

The Trump administration is bypassing Congress by paying for the aid with a Depression-era program, sparing vulnerable Republicans a tough vote before the November midterm elections. This initial $4.7 billion is planned as part of an overall $12 billion in aid to farmers, coming from the party that wants to cut food stamps for hungry families.

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Zhou Xiaochuan Chinese PBOC People's Bank ChinaREUTERS/Jason Lee

The Chinese yuan has weakened to its lowest levels in more than a year.
It has triggered fears that a sharp devaluation could roil markets like in 2015.
But China’s economy and global conditions are different than back then.

The Chinese yuan has been weakening–triggering fears of a sharp devaluation that could roil global markets. Should markets be worried? We see scope for the yuan to moderately depreciate through the rest of the year in response to slower growth, financial deleveraging and escalating trade tensions. The Chinese authorities are likely to rely on monetary and fiscal policy tools, rather than the currency, to manage any growth slowdown in the second half, in our view.

Screen Shot 2018 07 24 at 2.11.50 PMBlackRock BlogSee the rest of the story at Business Insider

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Referring to what he called “ridiculous and unfair” tariffs on U.S. imports, Trump said, “It’s going to stop — or we’ll stop trading with them. And that’s a very profitable answer, if we have to do it.”

Regarding the elimination of tariffs, Trump confirmed that he had suggested totally free trade among the G7 during the summit, explaining that, “Ultimately, that’s what you want. You want a tariff free. You want no barriers. And you want no subsidies. Because you have some cases where countries are subsidizing industries and that’s not fair.”

“If they retaliate, they’re making a mistake,” Trump said on Saturday, meaning that he believes U.S. allies have more to lose than gain by entering into a trade war with the U.S.

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