President Donald Trump ordered officials Thursday to look at rejoining the Trans-Pacific Partnership, which he had originally rejected days after taking office, causing fear in the agricultural sector.
Trump is looking to start doing business with China’s competitors as the conflict escalates with China.
The Pacific Rim trade deal was originally intended to counter China’s influence, but Trump pulled the United States out of it in one of his earliest moves as president.
According to the Washington Post, “Trump gave the new orders to U.S. Trade Representative Robert E. Lighthizer and National Economic Council Director Larry Kudlow during a White House meeting with lawmakers and governors, according to several GOP senators in attendance. Trump then told Lighthizer and Kudlow to “take a look at getting us back into that agreement, on our terms of course,” Sen. John Thune (R-S.D.). “He was very I would say bullish about that.”
Trump, Trans-Pacific Partnership, Top 3 Agricultural ETFs
Although many approached his remarks with skepticism. rejoining TPP would mark a reversal on the tenants that Trump ran under which accounted for some of the working class appeal for votes stating that the deals ripped of the U.S. and hurt American workers and manufacturing.
“The Trans-Pacific Partnership is another disaster done and pushed by special interests who want to rape our country,” Trump said in June of 2016. “Just a continuing rape of our country. That’s what it is, too. It’s a harsh word — it’s a rape of our country. This is done by wealthy people that want to take advantage of us and that want to sign another partnership.”
Related: Stocks Slump on Trump’s Tariff Talk
However, if the president does move forward with rejoining TPP, business groups and many Republican lawmakers would be sure to applaud the move.
The TPP is becoming one of the White House’s few remaining options as Trump searches for ways to exert pressure on China to back down from its threat of new tariffs on U.S. exports
According to the New York Times, “Mr. Trump’s decision to reconsider the deal comes as the White House tries to find ways to protect the agriculture sector, which could be badly damaged by the president’s trade approach. The risk of an escalating trade war with China has panicked American farmers and ranchers, who send many of their products abroad. China has responded to Mr. Trump’s threat of tariffs on as much as $150 billion worth of Chinese goods by placing its own tariffs on American pork, and threatening taxes on soybeans, sorghum, corn and beef.”
Let’s take a look at how the top 3 Agricultural ETFs are trading as of 5:30 p.m. Eastern time according to Yahoo Finance.
3 Agricultural ETFs Respond to Trump
- DB Agriculture Short ETN (ADZ) down 4.02%
- PowerShares DB Agriculture ETF (DBA) up 0.37%
- iPath Bloomberg Grains Total Return ETN (JJG) up 0.42%
America’s farmers helped send Trump to the White House and this backlash would not be appreciated. The Trump administration says it has ordered the Agriculture Department to create a program to help farmers hurt by trade.
Trade advisers say the department could use a program known as the Commodity Credit Corporation to purchase potentially billions of dollars of crops from American farmers. But it would be time-consuming and costly.
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