Trump signs order punishing china on trade; louisiana exports could be impacted business sugar cane history

Louisiana agriculture and other exports could take a big hit from an order signed by president donald trump thursday that paves the way for imposing import tariffs on chinese products and could trigger retaliatory measures from china.

“any type of trade retaliation will affect us sharply,” said jim richardson, an LSU economist. “trade is extremely important for the louisiana economy. We’re a major producer of agricultural products and chemicals we sell abroad.”

According to figures from the U.S. Census bureau, china is louisiana’s biggest export market, with the value of products shipped there reaching nearly $8 billion annually in 2016 and 2017. The state consistently ranks among the nation’s top 10 exporters, in large part because of the major ports on the mississippi and calcasieu rivers, shipping out louisiana products as well as those that flow through the state from other parts of the country.

“this makes us nervous when things get very unsettled,” said kyle mccann, associate commodity director for the louisiana farm bureau federation.Biggest economies “trade is vital to all of the grain crops produced in this state.”

Trump’s actions could lead to imposing tariffs on as much as $60 billion worth of chinese imports to punish beijing for what he said is the theft of american technology and chinese pressure on U.S. Companies to hand it over in exchange for doing business in china.

"It is the largest deficit of any country in the history of our world," trump said of the U.S.-china trade imbalance, blaming it for lost american jobs.

China has already warned that it will take "all necessary measures" to defend itself, raising the prospect of a trade war between the world’s two biggest economies.

It’s too early to determine the total impact a trade war with china could have on the louisiana economy because no one knows what products could be affected. “but from the louisiana perspective, there will be more losers than winners,” richardson said.

“we’ve done a lot of work to open up china to rice, beef and poultry exports,” said mike strain, commissioner of the louisiana department of agriculture and forestry.Steel aluminum “but when they do things they shouldn’t do, we can’t be afraid to hold them to task.”

The white house said thursday that trump would direct the office of the U.S. Trade representative to publish a list of proposed tariffs for public comment within 15 days. USTR has already identified potential targets: 1,300 product lines worth about $48 billion. That list will include aerospace, information and communication technology, and machinery, according to a USTR fact sheet. But further details were scant. The president is also asking treasury secretary steven mnuchin to come up with a list of restrictions on chinese investment.

Financial markets skidded thursday on the risk of growing commercial conflict between the U.S. And china and the possibility that china will impose retaliatory tariffs on U.S. Products.

The administration moves on thursday mark the end of a seven-month U.S. Investigation into the hardball tactics china has used to challenge U.S.Biggest economies supremacy in technology, including, the U.S. Says, dispatching hackers to steal commercial secrets and demanding that U.S. Companies hand over trade secrets in exchange for access to the chinese market. The administration argues that years of negotiations with china have failed to produce results.

Business groups mostly agree that something needs to be done about china’s aggressive push in technology — but they worry that china will retaliate by targeting U.S. Exports of aircraft, soybeans and other products and start a tit-for-tat trade war of escalating sanctions between the world’s two biggest economies.

In terms of acreage, soybeans are the largest crop in louisiana, with 1.3 million acres grown annually. Unlike some products, such as sugar cane or rice, which are only grown in parts of the state, soybeans are grown across louisiana. “if soybean prices are negatively impacted, that will hurt a lot of growers in the state,” said farm bureau’s mccann.Steel aluminum

The LSU agcenter estimates the value of the state’s soybean crop was $554.7 million in 2016. Just about all of the soybeans raised in the state are exported because there’s not much local demand for animal feed. The most common uses for soybeans are as animal feed or in food products such as cooking oil, margarine, tofu and mayonnaise.

The move against china comes just as the united states prepares to impose tariffs of 25 percent on imported steel and 10 percent on aluminum — sanctions that are meant to hit china for flooding the world with cheap steel and aluminum but also threaten trade with other countries and U.S. Allies.

In louisiana, winners from those tariffs would include steel makers, who contend cheap foreign steel has unfairly flooded the market. But imposing steel tariffs could come at a cost to port of new orleans’ imports, drive up costs for manufacturers that likely would be passed along to consumers, potentially endanger construction of proposed industrial projects and hit oil and gas drillers that rely on imported steel.Biggest economies

For now, the european union, australia, argentina, brazil and south korea are among nations that will get an initial exemption from the steel and aluminum tariffs, U.S. Trade representative robert lighthizer said thursday.

Lighthizer told the senate finance committee that there are countries involved in various stages of trade talks with the U.S., and that trump decided "to pause" the tariffs for those countries.

The trade official also cited canada and mexico in his list. The U.S. Is in consultations with the two countries in an effort to renegotiate the north american free trade agreement.

Trump campaigned on promises to bring down america’s massive trade deficit — $566 billion last year — by rewriting trade agreements and cracking down on what he called abusive commercial practices by U.S. Trading partners. But he was slow to turn rhetoric to action. In january, he imposed tariffs on imported solar panels and washing machines.Steel aluminum then he unveiled the steel and aluminum tariffs, saying reliance on imported metals jeopardizes U.S. National security.

Despite trump’s confident words thursday, business groups and republican lawmakers are worried his tariffs could undercut actions they have welcomed in his first year.

"The vast majority of our members are very concerned that these trade actions will at a minimum undermine the strong business confidence that has been created by the tax and regulatory process," said josh bolten, president and CEO of the business roundtable. "And if it’s taken to an extreme, it will reverse that progress."

Dozens of industry groups sent a letter last weekend to trump warning that "the imposition of sweeping tariffs would trigger a chain reaction of negative consequences for the U.S. Economy, provoking retaliation, stifling U.S. Agriculture, goods, and services exports, and raising costs for businesses and consumers."

Steel aluminum

To target china, trump has dusted off a cold war weapon for trade disputes: section 301 of the U.S. Trade act of 1974, which lets the president unilaterally impose tariffs. It was meant for a world in which large swaths of global commerce were not covered by trade agreements. With the arrival in 1995 of the world trade organization, which polices global trade, section 301 fell largely into disuse.