Trump Moves Ahead With Second Farm Bailout Despite Trade War Truce

The President may have intended to inspire confidence, but he may have inadvertently raised questions about the prospects for a trade deal. Here’s more…

from Zero Hedge

Mere minutes after the S&P closed at its lowest level since October of last year following another brutal session for US stocks (as investors were shaken by Jeff Gundlach’s ‘truth bombs’ and the looming Fed rate hike), President Trump was out with a tweet that, we imagine, was intended to inspire confidence – but instead may have inadvertently raised questions about the prospects for a lasting trade truce.

Trump tweeted Monday afternoon that he had authorized Secretary of Agriculture Sonny Perdue to move ahead with the second round of farm subsidies (“Market Facilitation Payments”) that the administration had authorized over the summer after China retaliated against the US by slapping tariffs on US agriculture imports like soybeans.

You will find more infographics at Statista

Though the subsidies hadn’t offset the trade war’s brutal impact on soybean farmersrelief for America’s beleaguered farmers finally arrived earlier this month when Chinese importers bought 500,000 in US soybeans, purportedly as a gesture of good faith following a “trade truce” struck by Trump and Chinese President Xi Jinping on the sidelines of the G-20 Summit in Argentina.

Perdue said that he’s set to release more details about the payments on Monday.

The tweet settled speculation in the agricultural press about whether Trump would continue with the payments following the temporary truce.

But some might interpret Trump’s decision as a sign that expectations for talks with China are low, and that Trump needs to hedge.