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GOP Outsiders In, and Out, as Primary Season Begins

Republican voters rejected ex-convict Don Blankenship Tuesday in a West Virginia Senate primary in which he sold himself as “Trumpier than Trump” but was vigorously opposed by the president. GOP voters in Indiana, meanwhile, chose wealthy businessman Mike Braun over two sitting congressmen to lead the party’s charge against a vulnerable Democratic senator in the fall.

President Donald Trump and his allies cheered the West Virginia result, which helped avert a potential political disaster for a GOP bracing for major losses in the November midterm elections.

In a possible sign of party unrest, however, Rep. Robert Pittenger lost in North Carolina to the Rev. Mark Harris, a Baptist pastor he narrowly beat two years ago. Pittenger is the first incumbent to lose his seat this primary season.

The day’s slate of early season elections tested the limits of the anti-establishment fervor that has defined the Trump era.

Hopelessly behind in West Virginia, Blankenship conceded defeat in the contest to determine Democratic Sen. Joe Manchin’s general election challenger. The Republican president fought in the campaign’s final days to defeat Blankenship, a retired coal executive, who remained popular among some West Virginia Republicans despite having served a year in prison for his role in a deadly mine disaster and attacked the Asian heritage of the top Senate Republican’s wife.

State Attorney General Patrick Morrisey claimed the nomination instead, promoting his record of challenging policies of the administration of former President Barack Obama and deflecting criticism of his roots in New Jersey, where he lost a 2000 congressional race.

“Mr. President, if you’re watching right now, let me tell you, your tweet was huge,” Morrisey said in his nomination address, referring to Trump’s election eve call for voters to shun Blankenship’s candidacy. “You’ve been to the state now four times. I’d like you to come back as many times as you can between now and November.”

Key contests

The key Senate contests headlined primary elections across four states on Tuesday that will help shape the political landscape in this fall’s midterm elections. Control of Congress is at stake in addition to state governments across the nation.

In most cases, the Republican candidates on the ballot had competed to be seen as the most conservative, the most anti-Washington and the most loyal to the Republican president.

Indiana

In Indiana, Democratic Sen. Joe Donnelly will face off in November against Braun, a multimillionaire owner of a national auto parts distribution business who loaned more than $5.4 million of his own money to his campaign. Braun credited his victory to voter disenchantment with “business as usual” and said he hoped to join other Republican senators who came from outside politics.

Another Indiana contest was less contentious: Greg Pence won the primary for the congressional seat his younger brother, Vice President Mike Pence, once held. Greg Pence is a Marine veteran and owner of two antique malls who once ran the now-bankrupt chain of Tobacco Road convenience stores. He’ll be the favorite to win the seat in November.

Ohio

In Ohio’s high-profile governor’s race, Democrats nominated Obama-era consumer watchdog Richard Cordray while Republicans selected state Attorney General Mike DeWine.

An Ohio state senator won the Republican primary to succeed retiring Rep. Pat Tiberi. The race had become a proxy fight between Tiberi, a GOP moderate, and conservative Republican Rep. Jim Jordan. Tiberi’s candidate, Troy Baldersonof Zanesville pulled out a win.

And on the local level, a woman who accused Trump of sexually harassing her more than a decade ago claimed the Democratic nomination in a race to represent an area southeast of Toledo in the state House of Representatives. Democrat Rachel Crooks, a 35-year-old university administrator, ran unopposed, but must next win a November general election to become the first Trump accuser to hold elected office.

A bright spot for Republicans in swing-state Ohio: GOP turnout was considerably stronger than Democratic voting in the open governor’s race. With nearly two-thirds of the vote counted, 567, 000 Republicans cast votes, to 412,000 Democrats.

U.S. Rep. Jim Renacci, with Trump’s support, won the Republican primary to challenge Democratic Sen. Sherrod Brown in November.

West Virginia

Yet none of Tuesday’s other contests was expected to have more impact on the midterm landscape than West Virginia, where Blankenship had embraced Trump’s tactics, casting himself as a victim of government persecution and seizing on xenophobia, if not racism, to stand out in a crowded Republican field that included Attorney General Morrisey and Congressman Evan Jenkins.

No matter Tuesday’s winner, Trump’s team was keeping pressure on Manchin. A pro-Trump political action committee America First was airing ads promoting Gina Haspel, Trump’s nominee to be CIA director, and urging residents to call Manchin to support her confirmation.

Manchin coasted to the Democratic nomination, but he remains a top Republican target this fall.

Speaking Tuesday night at his Charleston headquarters, he said he expects Trump to get involved in the contest, despite Manchin’s “good relationship” with the president. The Democrat said he would campaign as he always has: a bipartisan problem solver who works “for West Virginians.”

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GOP Outsiders In, and Out, as Primary Season Begins

Republican voters rejected ex-convict Don Blankenship Tuesday in a West Virginia Senate primary in which he sold himself as “Trumpier than Trump” but was vigorously opposed by the president. GOP voters in Indiana, meanwhile, chose wealthy businessman Mike Braun over two sitting congressmen to lead the party’s charge against a vulnerable Democratic senator in the fall.

President Donald Trump and his allies cheered the West Virginia result, which helped avert a potential political disaster for a GOP bracing for major losses in the November midterm elections.

In a possible sign of party unrest, however, Rep. Robert Pittenger lost in North Carolina to the Rev. Mark Harris, a Baptist pastor he narrowly beat two years ago. Pittenger is the first incumbent to lose his seat this primary season.

The day’s slate of early season elections tested the limits of the anti-establishment fervor that has defined the Trump era.

Hopelessly behind in West Virginia, Blankenship conceded defeat in the contest to determine Democratic Sen. Joe Manchin’s general election challenger. The Republican president fought in the campaign’s final days to defeat Blankenship, a retired coal executive, who remained popular among some West Virginia Republicans despite having served a year in prison for his role in a deadly mine disaster and attacked the Asian heritage of the top Senate Republican’s wife.

State Attorney General Patrick Morrisey claimed the nomination instead, promoting his record of challenging policies of the administration of former President Barack Obama and deflecting criticism of his roots in New Jersey, where he lost a 2000 congressional race.

“Mr. President, if you’re watching right now, let me tell you, your tweet was huge,” Morrisey said in his nomination address, referring to Trump’s election eve call for voters to shun Blankenship’s candidacy. “You’ve been to the state now four times. I’d like you to come back as many times as you can between now and November.”

Key contests

The key Senate contests headlined primary elections across four states on Tuesday that will help shape the political landscape in this fall’s midterm elections. Control of Congress is at stake in addition to state governments across the nation.

In most cases, the Republican candidates on the ballot had competed to be seen as the most conservative, the most anti-Washington and the most loyal to the Republican president.

Indiana

In Indiana, Democratic Sen. Joe Donnelly will face off in November against Braun, a multimillionaire owner of a national auto parts distribution business who loaned more than $5.4 million of his own money to his campaign. Braun credited his victory to voter disenchantment with “business as usual” and said he hoped to join other Republican senators who came from outside politics.

Another Indiana contest was less contentious: Greg Pence won the primary for the congressional seat his younger brother, Vice President Mike Pence, once held. Greg Pence is a Marine veteran and owner of two antique malls who once ran the now-bankrupt chain of Tobacco Road convenience stores. He’ll be the favorite to win the seat in November.

Ohio

In Ohio’s high-profile governor’s race, Democrats nominated Obama-era consumer watchdog Richard Cordray while Republicans selected state Attorney General Mike DeWine.

An Ohio state senator won the Republican primary to succeed retiring Rep. Pat Tiberi. The race had become a proxy fight between Tiberi, a GOP moderate, and conservative Republican Rep. Jim Jordan. Tiberi’s candidate, Troy Baldersonof Zanesville pulled out a win.

And on the local level, a woman who accused Trump of sexually harassing her more than a decade ago claimed the Democratic nomination in a race to represent an area southeast of Toledo in the state House of Representatives. Democrat Rachel Crooks, a 35-year-old university administrator, ran unopposed, but must next win a November general election to become the first Trump accuser to hold elected office.

A bright spot for Republicans in swing-state Ohio: GOP turnout was considerably stronger than Democratic voting in the open governor’s race. With nearly two-thirds of the vote counted, 567, 000 Republicans cast votes, to 412,000 Democrats.

U.S. Rep. Jim Renacci, with Trump’s support, won the Republican primary to challenge Democratic Sen. Sherrod Brown in November.

West Virginia

Yet none of Tuesday’s other contests was expected to have more impact on the midterm landscape than West Virginia, where Blankenship had embraced Trump’s tactics, casting himself as a victim of government persecution and seizing on xenophobia, if not racism, to stand out in a crowded Republican field that included Attorney General Morrisey and Congressman Evan Jenkins.

No matter Tuesday’s winner, Trump’s team was keeping pressure on Manchin. A pro-Trump political action committee America First was airing ads promoting Gina Haspel, Trump’s nominee to be CIA director, and urging residents to call Manchin to support her confirmation.

Manchin coasted to the Democratic nomination, but he remains a top Republican target this fall.

Speaking Tuesday night at his Charleston headquarters, he said he expects Trump to get involved in the contest, despite Manchin’s “good relationship” with the president. The Democrat said he would campaign as he always has: a bipartisan problem solver who works “for West Virginians.”

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US Trade Embargo Has Cost Cuba $130B, UN says

A United Nations agency said on Tuesday an “unjust” U.S. financial and trade embargo on Cuba had cost the country’s economy $130 billion over nearly six decades, coming up with the same estimate as the island’s communist government.

Although many U.S. allies join Washington in criticizing Cuba’s one-party system and repression of political opponents, the United States has lost nearly all international support for the embargo since the collapse of the Soviet Union.

The U.N. has adopted a non-binding resolution calling for an end to the embargo with overwhelming support every year since 1992. In a report ahead of the vote last year, Cuba estimated total damage from the embargo at $130 billion.

“This country which welcomes us today .. is testing its own ways to face the brutal human costs that it has sustained during an unjust blockade,” the head of the U.N.’s regional economic body for Latin America, ECLAC, Alicia Barcena told its biennial meeting in Havana on Tuesday.

“We evaluate it every year as an economic commission and we know that this blockade costs the Cuban people more than $130 billion at current prices and has left an indelible mark on its economic structure,” she said, without detailing how the organization came to that estimate.

After agreeing to a historic U.S.-Cuban detente in 2014, former U.S. President Barack Obama eased the embargo, which was fully put into place in 1962. But U.S. President Donald Trump last year tightened travel and trade restrictions again. Only the U.S. Congress can lift it in full.

“Despite the difficulties the Cuban economy is faced with, particularly due to the intensification of the blockade imposed on Cuba… we will continue to focus on the development goals set,” Cuban President Miguel Diaz-Canel said in his opening remarks at the meeting, attended also by U.N. Secretary-General Antonio Guterres.

Cuba’s Soviet-style, centralized economy has grown just 2.4 percent on average per year over the past decade, official statistics show, much less than the 7 percent annual expansion the government has estimated it needs in order to develop.

Cuba hoped market reforms introduced in the last decade would boost growth, but they have so far borne mixed results.

The ruling Communist Party earlier this year admitted implementation had been harder than expected.

ECLAC will support Cuba’s reform program, Barcena said.

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US Trade Embargo Has Cost Cuba $130B, UN says

A United Nations agency said on Tuesday an “unjust” U.S. financial and trade embargo on Cuba had cost the country’s economy $130 billion over nearly six decades, coming up with the same estimate as the island’s communist government.

Although many U.S. allies join Washington in criticizing Cuba’s one-party system and repression of political opponents, the United States has lost nearly all international support for the embargo since the collapse of the Soviet Union.

The U.N. has adopted a non-binding resolution calling for an end to the embargo with overwhelming support every year since 1992. In a report ahead of the vote last year, Cuba estimated total damage from the embargo at $130 billion.

“This country which welcomes us today .. is testing its own ways to face the brutal human costs that it has sustained during an unjust blockade,” the head of the U.N.’s regional economic body for Latin America, ECLAC, Alicia Barcena told its biennial meeting in Havana on Tuesday.

“We evaluate it every year as an economic commission and we know that this blockade costs the Cuban people more than $130 billion at current prices and has left an indelible mark on its economic structure,” she said, without detailing how the organization came to that estimate.

After agreeing to a historic U.S.-Cuban detente in 2014, former U.S. President Barack Obama eased the embargo, which was fully put into place in 1962. But U.S. President Donald Trump last year tightened travel and trade restrictions again. Only the U.S. Congress can lift it in full.

“Despite the difficulties the Cuban economy is faced with, particularly due to the intensification of the blockade imposed on Cuba… we will continue to focus on the development goals set,” Cuban President Miguel Diaz-Canel said in his opening remarks at the meeting, attended also by U.N. Secretary-General Antonio Guterres.

Cuba’s Soviet-style, centralized economy has grown just 2.4 percent on average per year over the past decade, official statistics show, much less than the 7 percent annual expansion the government has estimated it needs in order to develop.

Cuba hoped market reforms introduced in the last decade would boost growth, but they have so far borne mixed results.

The ruling Communist Party earlier this year admitted implementation had been harder than expected.

ECLAC will support Cuba’s reform program, Barcena said.

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Porn Star’s Lawyer Says Russian Paid Trump Attorney Cohen

Stormy Daniels’ lawyer said Tuesday he has information showing that Michael Cohen, President Donald Trump’s longtime personal attorney, received $500,000 from a company associated with a Russian billionaire within months of paying hush money to Daniels, a porn star who claims she had an affair with Trump.

Lawyer Michael Avenatti also said hundreds of thousands of dollars streamed into Cohen’s account from companies including Novartis, AT&T and Korea Aerospace. AT&T confirmed its connection Tuesday evening.

Avenatti did not provide documents to support the claims and did not reveal the source of his information.

But in a seven-page memo he detailed what he said were wire transfers going into and out of the account Cohen used to pay Daniels $130,000 in October 2016 to stay silent about her alleged affair with the soon-to-be president. Trump denies having an affair with Daniels, whose real name is Stephanie Clifford.

The memo, containing highly specific dates and amounts, stated that Viktor Vekselberg, a Russian billionaire, and his cousin “routed” eight payments totaling approximately $500,000 to Cohen’s company, Essential Consultants, between January and August 2017. The reason for the payment was not known.

Speculating without offering proof, the Avenatti memo said, “It appears these funds may have replenished the account following the payment to Ms. Clifford.”

Avenatti’s memo said the deposits into the account controlled by Cohen were made by Columbus Nova, an American investment company affiliated with the Renova Group, which is controlled by Russian billionaire Victor Vekselberg. 

Columbus Nova’s attorney Richard Owens said in a statement that, after Trump’s inauguration, the firm hired Cohen as a business consultant “regarding potential sources of capital and potential investments in real estate and other ventures,” but that it had nothing to do with Vekselberg.

Owens said any suggestion that Vekselberg used Columbus Nova as a conduit for payments to Cohen are false.

“Neither Viktor Vekselberg nor anyone else, other than Columbus Nova’s owners, were involved in the decision to hire Cohen or provided funding for his engagement,” he said.

Cohen and his attorney did not immediately respond to requests for comment.

At the time of the payments, there was an active FBI counterintelligence investigation – which special counsel Robert Mueller took over last May – into Russian election interference and any possible coordination with Trump associates.

Vekselberg was targeted for U.S. sanctions by the Trump administration last month. He built his fortune, currently estimated by Forbes at $14.6 billion, by investing in the aluminum and oil industries. More recently, he has expanded his assets to include industrial equipment and high technology.

Offering confirmation for at least one of the payments, AT&T said in a statement that Essential Consultants was one of several firms it “engaged in early 2017 to provide insights into understanding the new administration.”

“They did no legal or lobbying work for us, and the contract ended in December 2017,” the company said.

Such a confidential relationship would not violate federal lobbying laws if Cohen did not seek to influence Trump on the companies’ behalf. But hiring the president’s personal attorney for advice on how to woo Trump would be highly unusual, especially given that Cohen was never formally involved in the campaign or Trump’s administration.

Making the arrangement even stranger, the blue-chip companies’ payments to Cohen were routed to Essential Consultants LLC – the same company Cohen used to buy Stormy Daniels’ silence about her alleged affair with the President.

Novartis and Korea Aerospace did not immediately respond to requests for comment. 

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Trump to Allow Year-Round Sales of High-Ethanol Gas

President Donald Trump will allow year-round sales of renewable fuel with blends of 15 percent ethanol as part of an emerging deal to make changes to the federal ethanol mandate.

 

Republican senators and the White House announced the deal Tuesday after a closed-door meeting, the latest in a series of White House sessions on ethanol.

 

The Environmental Protection Agency currently bans the 15-percent blend, called E15, during the summer because of concerns that it contributes to smog on hot days. Gasoline typically contains 10 percent ethanol. Farm-state lawmakers have pushed for greater sales of the higher ethanol blend to boost demand for the corn-based fuel.

 

Iowa Sen. Chuck Grassley called the agreement good news for farmers and drivers alike, saying it would increase ethanol production and consumer choice at the pump.

 

Texas Sen. Ted Cruz said the deal will save the jobs of thousands of blue-collar workers at refineries in Texas, Pennsylvania and other states.

 

“Terrific final decision from @POTUS meeting,” Cruz tweeted. “This is a WIN-WIN for everyone.”

 

The decision allowing E15 to be sold year-round will provide “relief to refiners” and “protect our hardworking farmers and refinery workers,” White House spokeswoman Lindsay Walters said. “The president is satisfied with the attention and care that all parties devoted to this issue.”

 

Trump met Tuesday with Grassley, Cruz, Iowa Sen. Joni Ernst and Pennsylvania Sen. Pat Toomey, as well as EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue.

 

The EPA oversees the decade-old Renewable Fuel Standard, commonly known as the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline. The program’s intent was to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in renewable fuels over time.

 

The mandate has not worked as intended, and production levels of renewable fuels, mostly ethanol, routinely fail to reach minimum thresholds set in law.

 

Environmental groups criticized the deal, saying it would worsen air pollution during summer months.

 

“Waiving clean-air standards at the behest of one favored industry would not only set a precedent for bad policy, it could cost lives,” a coalition of environmental groups said in a statement.

 

Ernst said allowing year-round sale of E15 “will drive up domestic ethanol production and consumption” while helping to “maintain already low prices” for fuel credits that oil refiners must buy if they can’t blend ethanol into their fuels.

 

She and Grassley also said they were encouraged that the Trump administration will take a closer look at “hardship” waivers that have been granted to small refineries, a practice they say has hurt biofuels and undermined the RFS.

 

The EPA has reportedly granted a waiver to a refinery owned by billionaire Carl Icahn, a former Trump adviser, as well as other small refineries. The agency has not disclosed which refineries received the waivers, saying it did not want to reveal private business information.

 

Cruz said the president also agreed to consider his proposal to include fuel credits for ethanol that is produced domestically and exported. The proposal is meant to make it easier for the industry to meet annual sales volumes required under the renewable-fuel mandate.

 

“This is good for farmers, refiners and America,” Cruz said in a statement.

 

But the Renewable Fuels Association, an industry group, said allowing exports to qualify for RFS compliance could dramatically reduce domestic demand and result in retaliatory trade barriers from countries that import U.S. ethanol.

 

The group’s president, Bob Dinneen, called the export idea a “disgrace” and said ethanol producers and farmers would bear the brunt of any retaliatory tariffs.

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Trump to Allow Year-Round Sales of High-Ethanol Gas

President Donald Trump will allow year-round sales of renewable fuel with blends of 15 percent ethanol as part of an emerging deal to make changes to the federal ethanol mandate.

 

Republican senators and the White House announced the deal Tuesday after a closed-door meeting, the latest in a series of White House sessions on ethanol.

 

The Environmental Protection Agency currently bans the 15-percent blend, called E15, during the summer because of concerns that it contributes to smog on hot days. Gasoline typically contains 10 percent ethanol. Farm-state lawmakers have pushed for greater sales of the higher ethanol blend to boost demand for the corn-based fuel.

 

Iowa Sen. Chuck Grassley called the agreement good news for farmers and drivers alike, saying it would increase ethanol production and consumer choice at the pump.

 

Texas Sen. Ted Cruz said the deal will save the jobs of thousands of blue-collar workers at refineries in Texas, Pennsylvania and other states.

 

“Terrific final decision from @POTUS meeting,” Cruz tweeted. “This is a WIN-WIN for everyone.”

 

The decision allowing E15 to be sold year-round will provide “relief to refiners” and “protect our hardworking farmers and refinery workers,” White House spokeswoman Lindsay Walters said. “The president is satisfied with the attention and care that all parties devoted to this issue.”

 

Trump met Tuesday with Grassley, Cruz, Iowa Sen. Joni Ernst and Pennsylvania Sen. Pat Toomey, as well as EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue.

 

The EPA oversees the decade-old Renewable Fuel Standard, commonly known as the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline. The program’s intent was to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in renewable fuels over time.

 

The mandate has not worked as intended, and production levels of renewable fuels, mostly ethanol, routinely fail to reach minimum thresholds set in law.

 

Environmental groups criticized the deal, saying it would worsen air pollution during summer months.

 

“Waiving clean-air standards at the behest of one favored industry would not only set a precedent for bad policy, it could cost lives,” a coalition of environmental groups said in a statement.

 

Ernst said allowing year-round sale of E15 “will drive up domestic ethanol production and consumption” while helping to “maintain already low prices” for fuel credits that oil refiners must buy if they can’t blend ethanol into their fuels.

 

She and Grassley also said they were encouraged that the Trump administration will take a closer look at “hardship” waivers that have been granted to small refineries, a practice they say has hurt biofuels and undermined the RFS.

 

The EPA has reportedly granted a waiver to a refinery owned by billionaire Carl Icahn, a former Trump adviser, as well as other small refineries. The agency has not disclosed which refineries received the waivers, saying it did not want to reveal private business information.

 

Cruz said the president also agreed to consider his proposal to include fuel credits for ethanol that is produced domestically and exported. The proposal is meant to make it easier for the industry to meet annual sales volumes required under the renewable-fuel mandate.

 

“This is good for farmers, refiners and America,” Cruz said in a statement.

 

But the Renewable Fuels Association, an industry group, said allowing exports to qualify for RFS compliance could dramatically reduce domestic demand and result in retaliatory trade barriers from countries that import U.S. ethanol.

 

The group’s president, Bob Dinneen, called the export idea a “disgrace” and said ethanol producers and farmers would bear the brunt of any retaliatory tariffs.

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China Cuts US Soybean Purchases

With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues.

At the same time, farmers in China are being encouraged to plant more soy, apparently to help make up for any shortfall from the United States.

 

Beijing has included soybeans on a list of $50 billion of U.S. exports on which it has said it would impose 25 percent tariffs if the United States follows through on its threats to impose the same level of tariffs on the same value of Chinese goods. The U.S. tariffs could kick in later this month; China would likely retaliate soon after.

It can take a month or longer for soybean shipments to travel from the U.S. to China. Any soybeans en route to China now could be hit by the tariff by the time they arrive.

“The Chinese aren’t willing to buy US soybeans with a 25 percent tax hanging over their head,” said Dan Basse, president of AgResource, an agricultural research and advisory firm. “You just don’t want the risk.”

China typically buys most of its soybeans from South American nations such as Brazil and Argentina during spring and early summer. It shifts to U.S. soybeans in the fall. As a result, for now, the cutbacks from the United States are relatively small.

But should they persist, it could cause real pain to U.S. farmers. Roughly 60 percent of U.S. soybeans are shipped to China.

There might also be a political impact: Three of the top five soybean-exporting states — Iowa, Indiana and Nebraska — voted for President Donald Trump in 2016.

Illinois, the top soybean exporter, and Minnesota, the third-largest, backed Hillary Clinton.

Basse said that it has been roughly three weeks since China has made any major soybean purchases, an unusually long delay.

Some Chinese buyers might be showing support for their government in the trade dispute by turning away U.S. soybeans, Basse said. The dispute may also make it seem too risky to buy from the United States over the long run.

“The United States could lose the reliable supplier label that we’ve had these many years,” Basse said.

Data from the U.S. government data show that sales of soybeans have fallen from about 255,000 metric tons in the first week of April, when the trade dispute began, to just 7,900 in the week that ended April 26.

Cancellations have also jumped, to more than 140,000 metric tons in the week ending April 26. In the same week last year, there were no canceled sales at all.

Some analysts argue that the shifts aren’t yet particularly significant. China buys most of its soybeans from the United States in the late summer and fall, and then switches to South American sources, mainly Brazil and Argentina, in the spring. So the current market activity doesn’t necessarily reflect the pattern that would occur during the main buying season.

“These numbers we’re talking about are pretty minor,” said John Baize, an economist for the U.S. Soybean Export Council.

The U.S. ships about 35 million metric tons of soybeans to China a year, Baize said. China usually imports about 100 million tons a year and can’t import enough from other countries, he said, to abandon the United States as a source.

“Where’s China going to buy its beans?” Baize asked.

That may be true in the short run. But Basse suggests that Brazil has enough land that could be used for soybean cultivation that it could soon mostly replace the United States as a supplier to China.

And if the Chinese market were to be closed to U.S. farmers, they might be able to sell some portion of their soybeans to other markets. Baize said that huge multinational companies, such as Cargill and ADM, might, for example, sell more U.S. soybeans to Europe, where they wouldn’t face any tariffs, though this likely wouldn’t make up for the loss of the Chinese market.

At the same time, China is looking more to its own farmers. Since China announced its potential tariffs on U.S. soy in April, the government has encouraged farmers to cultivate more soybeans. Beginning this month, Chinese farmers say, Beijing reduced corn subsidies and raised annual soybean subsidies from 2550 yuan ($400) per hectare to 3000 yuan ($470) or more per hectare in major soybean-producing provinces in northeast China.

An adjustment had already been planned to help draw down China’s substantial corn stockpiles, so the change wasn’t necessarily aimed at U.S. soy growers, analysts say.

But the subsidy adjustment did come with political undertones. Officials in major soybean-producing provinces were describing the promotion of local soybeans as “the most important political task in agricultural production at present.” Heilongjiang in northeast China announced a pilot project to plant soybeans on over 100,000 new hectares, with an extra 2,250 yuan ($353) subsidy per hectare.

The moves are prompting farmers like Liu Cong to focus more on growing soy. Liu says he used most of his land to grow corn last year but this year is planting more soybeans.

“This is encouraging for farmers,” he said in a phone interview. “We’re more motivated.”

Zhang Xiaoping, China director for the U.S. Soybean Export Council, says that Chinese buyers have been canceling soybean purchases of last year’s U.S. soybean harvest because of the threat of tariffs.

“The buyers literally stopped buying from the U.S.,” Zhang said. “Exporters cannot find any buyers in China.”

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China Cuts US Soybean Purchases

With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues.

At the same time, farmers in China are being encouraged to plant more soy, apparently to help make up for any shortfall from the United States.

 

Beijing has included soybeans on a list of $50 billion of U.S. exports on which it has said it would impose 25 percent tariffs if the United States follows through on its threats to impose the same level of tariffs on the same value of Chinese goods. The U.S. tariffs could kick in later this month; China would likely retaliate soon after.

It can take a month or longer for soybean shipments to travel from the U.S. to China. Any soybeans en route to China now could be hit by the tariff by the time they arrive.

“The Chinese aren’t willing to buy US soybeans with a 25 percent tax hanging over their head,” said Dan Basse, president of AgResource, an agricultural research and advisory firm. “You just don’t want the risk.”

China typically buys most of its soybeans from South American nations such as Brazil and Argentina during spring and early summer. It shifts to U.S. soybeans in the fall. As a result, for now, the cutbacks from the United States are relatively small.

But should they persist, it could cause real pain to U.S. farmers. Roughly 60 percent of U.S. soybeans are shipped to China.

There might also be a political impact: Three of the top five soybean-exporting states — Iowa, Indiana and Nebraska — voted for President Donald Trump in 2016.

Illinois, the top soybean exporter, and Minnesota, the third-largest, backed Hillary Clinton.

Basse said that it has been roughly three weeks since China has made any major soybean purchases, an unusually long delay.

Some Chinese buyers might be showing support for their government in the trade dispute by turning away U.S. soybeans, Basse said. The dispute may also make it seem too risky to buy from the United States over the long run.

“The United States could lose the reliable supplier label that we’ve had these many years,” Basse said.

Data from the U.S. government data show that sales of soybeans have fallen from about 255,000 metric tons in the first week of April, when the trade dispute began, to just 7,900 in the week that ended April 26.

Cancellations have also jumped, to more than 140,000 metric tons in the week ending April 26. In the same week last year, there were no canceled sales at all.

Some analysts argue that the shifts aren’t yet particularly significant. China buys most of its soybeans from the United States in the late summer and fall, and then switches to South American sources, mainly Brazil and Argentina, in the spring. So the current market activity doesn’t necessarily reflect the pattern that would occur during the main buying season.

“These numbers we’re talking about are pretty minor,” said John Baize, an economist for the U.S. Soybean Export Council.

The U.S. ships about 35 million metric tons of soybeans to China a year, Baize said. China usually imports about 100 million tons a year and can’t import enough from other countries, he said, to abandon the United States as a source.

“Where’s China going to buy its beans?” Baize asked.

That may be true in the short run. But Basse suggests that Brazil has enough land that could be used for soybean cultivation that it could soon mostly replace the United States as a supplier to China.

And if the Chinese market were to be closed to U.S. farmers, they might be able to sell some portion of their soybeans to other markets. Baize said that huge multinational companies, such as Cargill and ADM, might, for example, sell more U.S. soybeans to Europe, where they wouldn’t face any tariffs, though this likely wouldn’t make up for the loss of the Chinese market.

At the same time, China is looking more to its own farmers. Since China announced its potential tariffs on U.S. soy in April, the government has encouraged farmers to cultivate more soybeans. Beginning this month, Chinese farmers say, Beijing reduced corn subsidies and raised annual soybean subsidies from 2550 yuan ($400) per hectare to 3000 yuan ($470) or more per hectare in major soybean-producing provinces in northeast China.

An adjustment had already been planned to help draw down China’s substantial corn stockpiles, so the change wasn’t necessarily aimed at U.S. soy growers, analysts say.

But the subsidy adjustment did come with political undertones. Officials in major soybean-producing provinces were describing the promotion of local soybeans as “the most important political task in agricultural production at present.” Heilongjiang in northeast China announced a pilot project to plant soybeans on over 100,000 new hectares, with an extra 2,250 yuan ($353) subsidy per hectare.

The moves are prompting farmers like Liu Cong to focus more on growing soy. Liu says he used most of his land to grow corn last year but this year is planting more soybeans.

“This is encouraging for farmers,” he said in a phone interview. “We’re more motivated.”

Zhang Xiaoping, China director for the U.S. Soybean Export Council, says that Chinese buyers have been canceling soybean purchases of last year’s U.S. soybean harvest because of the threat of tariffs.

“The buyers literally stopped buying from the U.S.,” Zhang said. “Exporters cannot find any buyers in China.”

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