European Commission President Jean-Claude Juncker is meeting President Donald Trump at the White House today in a bid to get the U.S. to drop its 25 per cent tariffs on steel imports, and 10 per cent on aluminium products.
What's the background on the tariffs?
Juncker will suggest two paths, one of which is a deal among major auto exporting nations including the U.S., Europe, Japan and Canada to reduce tariffs on cars. "Unfortunately, America's hard-working agricultural producers have been treated unfairly by China's illegal trading practices and have taken a disproportionate hit when it comes illegal retaliatory tariffs".
Soybean farmers have also been hurt by falling soy prices tied to these tariffs.
In a Rose Garden announcement, Trump said the European Union had also agreed to buy USA soybeans, a day after he announced a $12 billion bailout package for farmers hit by retaliatory tariffs. These steel tariffs have caused the price of steel to jump significantly, which in turn has caused the price of farm equipment to also rise.
"Both the US and the European Union drop all Tariffs, Barriers and Subsidies!" he wrote.
The biggest exporter of USA -made cars is a German company - BMW, through its plant in Spartanburg, South Carolina.
"It does not make any sense to me as an economist", says Ohio State University professor Ian Sheldon, predicting the action will distort worldwide commodity markets and possibly trigger a dispute filing at the World Trade Organization.More news: Pakistan votes after controversial, bitter campaign
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The $12 billion will reportedly come in the form of direct assistance, a food purchase and distribution program, and a trade promotion program. It allows the CCC to borrow up to $30 billion from the Treasury Department to "stabilize, support, and protect farm income and prices".
John Kasich (R) said Wednesday that President TrumpDonald John Trump2 women win Georgia Dem runoffs, extending streak for female candidates Giuliani on Trump-Cohen audio: "I've dealt with much worse tapes than this" Roseanne to sit down with Hannity in first television interview since ABC canceled show MORE is resorting to "farm welfare" when what USA farmers really want the administration to stop imposing tariffs. "All will be Great!" he concluded.
But more voices including in Trump's own Republican Party are coming out against his confrontational stance.
Tweeting about the trade standoff on Tuesday, Trump repeated his call to remove all tariffs and trade barriers. Ultimately, that will make cars more expensive for USA consumers.
While the USA claims the retaliation is "illegal", the Trump administration has acknowledged it is doing damage to American farmers, and announced it will provide up to $12 billion in aid to farmers hurt by trade tariffs.
Sen. Ben Sasse, R-Neb., agreed, calling the aid "trade-war bailouts".
"These tariffs are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy", Corker said.