US Farmers Choke On Trade War With China

In April we told you about how some of the “unintended consequences” of Trump’s steel tariffs, such as an Illinois farmer who put the brakes on a $71,000 grain mill, but had to hold off on the purchase because the seller raised the price 5% to account for the rising price of steel, or Iowa grain mill producer Sukup Manufacturing, which had to hike their prices for grain storage bins. 

The Wall Street Journal now reports that the US-China “trade spat” is now affecting US exporters of soybeans, pork and other commodities. 

Since early April, when China announced tariffs on some U.S. agricultural goods and threatened to target others, Chinese importers have canceled purchases of corn and cut orders for pork while dramatically reducing new soybean purchases, according to U.S. Department of Agriculture data. Chinese importers’ new orders of sorghum, a grain used in animal feed, have dwindled while cancellations increased.

The chill in agricultural trade is sending jitters through the U.S. Farm Belt, which for years has dispatched farmers on trade missions to cultivate the Chinese market. –WSJ

As the summer persists and if nothing’s been resolved, it will start showing up as a pretty big hole in U.S. exports,” warned Soren Schroder, CEO of Bunge Ltd., one of the world’s largest soybean processors and traders.

Last Thursday, a ship bound for China carrying over 58,000 tons of American sorghum was diverted to South Korea after Beijing said it would levy a hefty deposit on U.S. shipments of the grain amid an anti-dumping probe.

Importers now facing losses of millions of dollars on their cargoes are trying to resell the grain to buyers elsewhere but are being forced to offer steep discounts.

Four cargoes have been resold to Saudi Arabia and Japan, and another is heading to Spain. If the ‘Peak Pegasus’ unloads in South Korea, it would be first of the Chinese cargoes to be resold in that country. –Reuters

No date has been set in stone for the various tariffs China has threatened to impose, however senior US officials including Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer are meeting with Chinese officials in Beijing this week for negotiations. That said, even if they reach an agreement, the uncertainty created by the threatened tariffs has already done quite a lot of damage in the commodities sector.

China spent around $20 billion annually on US agricultural products in 2017 – and their growing apetite for pork and other meats requires huge quantities of feed grain, such as the aforementioned diverted sorghum. China-based importers are holding off on new soybean orders from the US, including their usual advance purchase of this fall’s crops, as nobody wants to take the risk that a shipment will be slapped with a giant tariff by the time it is delivered. As such, China is buying more beans from South American suppliers, according to Bunge’s Schroder.

Chinese buyers ordered about 255,000 metric tons of U.S. soybeans during the week ended April 5, according to the USDA, but new sales over the rest of the month came to about 11,000 metric tons, a sharp decline. Meanwhile, purchasers canceled nearly 76,000 metric tons’ worth of orders over the month. –WSJ

If [the Chinese] market closes, it could be devastating for local communities across the Midwest,” said Senator Chuck Grassley (R-IA) in a statement. 

Despite the fact that US soybeans are around $15 a ton cheaper than beans from Brazil, a 25% tariff would cost Chinese importers around $100 a ton according to St. Louis-based trader Ken Morrison. 

Ed Breen, chief executive of crop-seed supplier DowDuPont Inc., said Thursday that if China steps back from U.S. soybean purchases, growing markets like Mexico, Indonesia, Vietnam and Turkey would fill the void. –WSJ

Following China’s tariff on US pork products on April 2, the USDA reported the largest weekly drop in net pork sales to the country since October 2016, and sales have declined further since then.

Given expanding pork supplies—boneless hams in cold storage hit a record 86 million pounds earlier this year—and another big slaughterhouse set to open later this year, the industry has been aiming to sell more to China, not less. –WSJ

“With the trade negotiations, a lot of unknowns with our future demand is clearly not a positive to the pork market at this stage,” said Jason Roose, VP of U.S. Commodities Inc., a livestock and grain advisory firm based in Des Moines, Iowa.

Given China’s growing need for agricultural imports, some believe that China won’t be able to avoid US crops for long. That said, the biggest danger in this trade war is US farmers and agricultural companies developing a reputation for unreliability – prompting other countries to maximize their own crop production, according to research firm AgResource Co’s President, Dan Basse. 

“Our biggest concern is the message this sends to the world,” said Mr. Basse, adding that “Brazil still has an abundance of land to bring into production, and farm profits there would rise to the chagrin of the U.S. farmer.”

Trump might be wise to note that the very US farmers suffering the unintended consequences of the trade spat with China are the very same folks from he promised not to neglect.

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War & The Imperial Presidency: Congress Offers Bipartisan Blank-Check To Trump

Authored by Major Danny Sjursen via TomDispatch.com,

It may be too late. The president of the United States is now a veritable autocrat in the realm of foreign policy. He has been since at least 1945, when the last congressionally declared war finally ended. Wars in Korea, Vietnam, Grenada, Panama, Somalia, Kosovo, Afghanistan, Iraq, Syria, and Yemen (among other places) were all waged via executive fiat or feeble, open-ended congressional authorizations for the use of military force, aka AUMFs. So it has been with increasing intensity for 73 years and so, most likely, it will remain.

Along with many others, this military officer has repeatedly decried the no-longer-new normal of congressional acquiescence to presidential power to no avail. When, in September 2017, Republican Senator Rand Paul sought to repeal (and replace within six months) the existing 2001 AUMF, which had authorized the president to use force against the perpetrators and enablers of the 9/11 attacks, he could barely muster 35 votes. Given that any president, Republican or Democrat, would veto such a curtailment of the essentially unlimited executive prerogative to make war, that’s still some 32 votes short of a Senate override. In hopelessly divided Washington, that’s the definition of impossibility.

Fear not, two brave “centrist” senators, Republican Bob Corker and Democrat Tim Kaine, are riding to the rescue. Their recently announced bill to repeal and replace the existing AUMF promises to right seven decades of wrong and “establish rigorous congressional oversight,” “improve transparency,” and ensure “regular congressional review and debate.”

In reality, it would do none of those things. Though Senator Kaine gave a resounding speech in which he admitted that “for too long Congress has given presidents a blank check to wage war,” his bill would not stanch that power. Were it ever to pass, it would prove to be just another blank check for the war-making acts of Donald Trump and his successors.

Though there have certainly been many critiques of their piece of legislation, most miss the larger point: the Corker-Kaine bill would put a final congressional stamp of approval on the inversion of the war-making process that, over the last three-quarters of a century, has become a de facto constitutional reality. The men who wrote the Constitution meant to make the declaration of war a supremely difficult act, since both houses of Congress needed to agree and, in case of presidential disagreement, to be able to muster a supermajority to override a veto.

The Corker-Kaine bill would institutionalize the inverse of that. It would essentially rubber stamp the president’s authority, for instance, to continue the ongoing shooting wars in at least seven countries where the U.S. is currently dropping bombs or firing off other munitions. Worse yet, it provides a mechanism for the president to declare nearly any future group an “associated force” or “successor force” linked to one of America’s current foes and so ensure that Washington’s nearly 17-year-old set of forever wars can go on into eternity without further congressional approval.

By transferring the invocation of war powers to the executive branch, Congress would, in fact, make it even more difficult to stop a hawkish president from deploying U.S. soldiers ever more expansively. In other words, the onus for war would then be officially shifted from a president needing to make a case to a skeptical Congress to an unfettered executive sanctioned to wage expansive warfare as he and his advisers or “his” generalsplease.

How to Make War on Any Group, Any Time

Should the Corker-Kaine bill miraculously pass, it would not stop even one of the present ongoing U.S. conflicts in the Greater Middle East or Africa. Instead, it would belatedly put a congressional stamp of approval on a worldwide counter-terror campaign which isn’t working, while politely requesting that the president ask nicely before adding new enemies to a list of “associated” or “successor” forces; that is, groups that are usually Arab and nominally Muslim and essentially have little or no connection to the 9/11 attacks that produced the 2001 AUMF.

So let’s take a look at just some of the forces that would be preemptively authorized to receive new American bombs and missiles, Special Operations forces raids, or whatever else the president chose under the proposed legislation, while raising a question rarely asked: Are these groups actually threats to the homeland or worthy of such American military efforts?

Al-Qaeda (AQ) proper naturally makes the list. Then, of course, there’s the Afghan Taliban, which once upon a time sheltered AQ. As nearly 17 years of effort have shown, however, they are militarily unbeatable in a war in their own homeland that is never going well for Washington. In addition, there are no significant al-Qaeda forces left in Afghanistan for the Taliban to potentially shelter. AQ long ago dispersed across the region. The age of plots drawn up in the caves of the Hindu-Kush is long over. In addition, the focus of the Taliban remains (as it always was) highly local. I fought those guys for 12 months and, let me tell you, we never found any transnational fighters or al-Qaeda vets. The vast majority of the enemies Washington mislabels as “Taliban” are poor, illiterate, unemployed farm boys interested, at best, in local power struggles and drug running. They rarely know what’s happening just one valley over, let alone in Milwaukee.

Then there’s al-Qaeda in the Arabian Peninsula (AQAP), a particularly vicious AQ franchise in Yemen. These are genuine bad actors and, for a while during the Obama administration, were considered the top terror threat to the U.S. Still, that’s not who the American military actually fights in Yemen most of the time. U.S. Air Force fuelers provide in-flight service, U.S. analysts provide updated targeting intelligence, and U.S. megacorporations sell guided bombs to the Saudis, who mostly bomb Shia Houthi rebels (and often civilians) unaffiliated with — in fact, opposed to — AQAP. Worse still, the U.S.-backed campaign against the Houthis actually empowers AQAP by sowing chaos and creating vast ungoverned spaces for it to move into. The Houthis aren’t on the Corker-Kaine list yet, but no doubt (amid increasing military tensions with Iran) Mr. Trump would have little trouble adding them as “associated forces.” Are they brown? Yes. Do they worship Allah? Sure. Throw ‘em on the list.

Al-Shabaab in Somalia is also included. Its nasty militiamen do make life miserable in Somalia and have occasionally called for attacks on U.S. targets. There’s no evidence, however, that U.S. military operations there have ever stabilized the region or improved long-term security. Meanwhile, al-Shabaab tries to radicalize young Somali-American youth in immigrant communities like cities like Minneapolis. Their main gripe: the U.S. military presence and drone strikes in East Africa. And on and on the cycle goes.

Al Qaeda in the Islamic Magreb (AQIM), which operates in North Africa, is another “associated force” that’s taken on the AQ moniker, though with a distinctly local flavor. AQIM operates in several countries. Does the Corker-Kaine bill then imply that the U.S. military may conduct strikes and raids anywhere in North Africa? Odds are that it does. Again, though AQIM is violent and problematic for local African security forces, they’ve never successfully attacked the United States. As professor and Africa expert Nathaniel Powell has shown, more often than not U.S. military operations in the Maghreb or the Sahel (just south of the Sahara desert) tend only to exacerbate existing conditions, motivate yet more Islamists, and tangle Washington up in what are essentially local problems and grievances.

Finally, there’s al-Qaeda in Syria, as the bill labels them. This is the crew that used to be known as the al-Nusra Front. The Islamic State, or ISIS, eventually brokeoff from AQ and has even fought al-Nusra Front militants on occasion. No doubt, U.S. interests are never served when any al-Qaeda franchise gains power and influence. Still, there’s little evidence that the former al-Nusra Front, which is losing the civil war inside Syria, has either the staying power or capacity to attack the U.S. homeland.

Add in this: the U.S. military in Syria has rarely attacked al-Nusra, focusing instead on ISIS or occasional strikes at the regime of Syrian autocrat Bashar al-Assad. In addition, in the past, America’s Saudi allies have supported and funded this and other radical Islamist groups and some U.S. aid has even inadvertently fallen into the hands of al-Nusra Front fighters in the mess that passes for the Syrian civil war.

And don’t let me get started on those “successor forces” — think ISIS and its brands around the world — a term so vague as to ensure that any Islamist organization or country, including Iran, could, by a stretch of the imagination, be defined as a target of the U.S. military.

Lumping these various groups under the umbrella of “associated” or “successor” forces ignores the agency and specificity of each of them and so provides any president with a blank check to fight anyone he deems loosely Islamist the world over. And if he cares to, he can just add any new gang he chooses onto the list and dare the Senate to muster 67 votes to stop him.

Consider it a remarkable formula for forever war.

The Dangerous Evolution of Article II of the Constitution

When you get right down to itall the debate over AUMFs is little more than a charade. It hardly matters whether Congress ever updates that post-9/11 document. When, for instance, President Trump recently sent missiles soaring against the Assad regime in response to an alleged chemical attack on a suburb of Damascus, neither he nor his advisers even bothered to suggest that the strike fell under that AUMF. Instead, they simply claimed that Trump was exercising his presidential prerogative under Article II, Section 2, of the Constitution, which makes him commander-in-chief.

In such moments, right-wing presidents and their advisers have no compunctions about turning the standard liberal argument about the Constitution on its head — that it’s a “living document” subject to the exigencies of changing times. Of course, it’s not exactly an obscure fact of history that the framers of that document never meant to grant the chief executive unilateral authority to start new conflicts — and “strictly constructionist” conservatives know it. The Founders were terrified of standing armies and imperial overreach. After all, when they wrote the document they’d only recently brought their own revolt against imperial England and its vaunted army of redcoats to a successful conclusion. So, to construe the Constitution’s commander-in-chief clause, which gave the president the authority to oversee the generals in an ongoing war, as letting him declare wars or even expand them qualifies as absurd. Nonetheless, that’s just what recent presidents have claimed.

What they like to say is that times have changed, that warfare is now too swift for an eighteenth-century recipe involving Congress, and that, in such abbreviated circumstances, presidents need the authority to apply military force at will on a global scale. The thing is, Congress has already recognized this potential reality and codified it into law in the 1973 War Powers Act. This fairly sensible, though generally ignored, piece of legislation requires the president to notify Congress within 48 hours of a military deployment and remove the troops after 60 days unless legislation officially sanctions the escalation. Presidents tend to be meticulous about the first requirement and then — like Congress itself — pay no attention to the second.

Obviously, Bashar al-Assad’s regime had nothing to do with 9/11 and so falls under no imaginable interpretation of that 2001 AUMF. Therefore, President Trump has on his own essentially launched a new conflict, with a new enemy, in western Syria. He’s “notified” Congress of the latest missile strikes, of course, and that’s that.

Salvation Will Not Come From the “Bipartisan” Center

Early indications are that the Corker-Kaine bill is unlikely to pass the Senate (no less the House) and, if it did, wouldn’t have a hope in hell of outlasting a presidential veto. You know that the system is broken, possibly beyond repair, when the secretary of defense — one “Mad Dog” Mattis — is reportedly the only figure around Donald Trump to have argued for getting a congressional stamp of approval before launching those missiles against the Assad regime. Think of it this way: a retired general, the official top dog of destruction in this administration, was overruled by the civilian leadership in the White House when it came to an act of imperial war-making.

In other words, we’re through the looking glass, folks!

As a thought experiment: What would it actually take for a supermajority of both houses of Congress to curtail a president’s unilateral war-making power? Liberals might have thought that the election of a boorish, uninformed executive would embolden moderates on both sides of the aisle to reclaim some authority over the lives and deaths of America’s soldiers. It didn’t, nor did such passivity start with Donald Trump. Mainstream liberals certainly treated the presidency of George W. Bush as if it were the worst disaster since Richard Nixon, Watergate, and Vietnam. Even so, they never had the guts to cut off funds for the obvious, ongoing folly in Iraq. Mostly, in fact, they first voted for a resolution supporting that invasion and then heckled pointlessly from the sidelines as Bush waged a dubiously legal, unwinnable war to his heart’s content.

Conservatives absolutely hated Obama. They questioned his very legitimacy and even his citizenship (as did Citizen Trump, of course) — or at least stayed conveniently silent while the far right of the GOP caucus did so. Still, Republicans then essentially did nothing to curtail his unilateral decision to expand drone attacks to a kind of frenzy across the Greater Middle East and parts of Africa and oversee a special operations bonanza. Rarely, for example, in the bazillion hearings the Republicans sponsored on the deaths of an American ambassador and others in Benghazi, Libya, did anyone call for a serious reappraisal of executive war-making authority.

Despite the paltry Corker-Kaine bill, expect no respite or salvation from Congress, which is, in truth, at the heart of the problem. To move the needle on war-making would take grassroots pressure similar to that applied by the Vietnam-era antiwar movement. But such a movement looks highly unlikelywith the draft long gone, few citizens engaged in foreign policy issues, and even fewer seeming to notice that this country has now been involved in still-spreading wars for almost 17 years.

To recapture military authority from an imperial president and inject sanity into the system, “We the People” would have to break out the pink pussy caps, gather the young and their social media skills — Parkland-style — and bring the sort of energy now going into domestic crises to issues of war and peace. Suffice it to say, I’m not hopeful.

Whether noticed or not, whether attended to or not, there is, however, a grave question before the American people: Is the United States to remain a democracy (of sorts) within its borders, but a war-making empire beyond its shores? Certainly, it’s most of the way to such a state already with its “all volunteer” imperial military and unrestrained war presidency.

Just about everything is in place for an (elected) executive emperor to move his imperial chess pieces wherever he pleases. Nothing in the Corker-Kaine cop-out of a bill can or will change that. In truth, it doesn’t even pretend to.

When it comes to war, the president reigns supreme — and so, it seems, he shall remain.

Hail, Caesar!

*  *  *

Major Danny Sjursen, a TomDispatch regular, is a U.S. Army officer and former history instructor at West Point. He served tours with reconnaissance units in Iraq and Afghanistan. He has written a memoir and critical analysis of the Iraq War, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of the Surge. He lives with his wife and four sons in Lawrence, Kansas. Follow him on Twitter at @SkepticalVet and check out his podcast “Fortress on a Hill,” co-hosted with fellow vet Chris ‘Henri’ Henriksen.

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Swiss Bank Replaces Seven Employees With Five Robots

A Swiss bank has replaced seven employees with five software robots in order to speed up workflow, according to Bloomberg.

In a pilot project, St. Galler Kantonalbank AG opted for the second option. The bank is so satisfied with the test results that it wants to decide on further assignments by the end of May. –Bloomberg

When St. Galler Kantonalbank (SGKB) needed to transfer around 5,000 securities positions into its own IT systems during the acquisition of M.M. Warburg Bank Schweiz AG’s private banking business, the five robots were put on the job, and “did their job well,” according to SGKB. Now they’re exploring other applications for digital employees.

We’ve seen that’s technically feasible and now we’re exploring whether other applications are worthwhile, and I’m very optimistic about that“, Felix Buschor, member of the management board, said in an interview with Bloomberg. “The assessment of the potential is in full swing.”

Buschor admits some of their human employees are beginning to worry about their jobs – though he offers up a Jedi mind trick of sorts to reassure them that “as we have always compensated efficiency gains through natural fluctuation and because we paid close attention to enabling our employees to develop new technologies, the acceptance is high,” whatever that means.

More banks?

According to Christian Voigt, managing director of Nuremberg-based IT consultant Roboyo GmbH which worked with the Swiss bank, St. Galler Kantonalbank isn’t the only one looking to send human bank employees to the unemployment line. 

In the financial sector, the automation of processes is currently a huge topic, and we work with banks, insurers and leasing companies,” said Voigt.

He attributes the banks’ strong interest to time savings and cost reductions. For example, thanks to the use of robots, it is possible to forgo costly and expensive software interfaces for the communication between two systems, he said. “Sometimes, seven-digit amounts of money are needed for such an interface.” –Bloomberg

Last November, former Deutsche Bank CEO John Cryan said that AI technology will help Germany’s largest bank cut tens of thousands of jobs.

Deutsche has made about 4,000 of the 9,000 job cuts promised under a five-year restructuring plan announced in late 2015. Mr Cryan said many of the additional cuts would come through using technology to boost efficiency in the bank’s processes.

“There we’ve got the most to gain,” he said. “We’re too manual, which can make you error-prone and it makes you inefficient. There’s a lot of machine learning and mechanisation that we can do.Financial Times

When asked about the specific number of employees at risk of being replaced, he told Laura Noonan at the Financial Times it would be a “big number.”

SGKB’s robot bankers are estimated by Buschor to cost between 20,000 and 30,000 Swiss francs (currently trading in parity with the USD) – vs. a banker which can cost much more than that, every year.

A study by GFT Technologies SE carried out at the end of 2017 showed that technologies and artificial intelligence have the potential to revolutionize the financial sector. The survey involved 285 professionals from small to large retail banks in eight countries, including Germany, who were interviewed by phone in collaboration with market researcher Frost & Sullivan. Around 94 percent of all participants of major banking institutions saw direct added value in artificial intelligence solutions. –Bloomberg

According to Isaac Asimov’s “Three Laws of Robotics,” our robo-slaves may not injure a human being, or through inaction, allow a human being to come to harm. You’ll note there’s nothing in there about robot bankers sending humans into poverty, or stealing customer deposits and going to the robot strip club… however they’ll most certainly require physical bodies before the latter happens.

You have been warned. 

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