Today I’d like to share with two things you that have come to my attention, which may affect the odds of the trade deal and Trump’s Re-Election:

  • China closes ‘vocational education centers’ for Chinese Muslims.
  • The US Department of Agriculture released income data for its agricultural sector. The figures are somewhat at odds with the mainstream media reports about ‘low spirits’ of the US farmers.

Uyghur case

In response to the wave of global condemnation and the recent White House bill on Xinjiang, rich in sanctions from Trump - China apparently succumbed to pressure and decided to close forced "training centers" for Chinese Muslims. These camps have been labelled as concentration camps in the West:

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Along with the unrest in Hong Kong and possible abuse of basic human rights in the Xinjiang Uygur Autonomous region, the resolution of the trade dispute between the US and China has been barred.

UN and human rights organizations estimated the number of detainees at 1-2 million people. The governor of the region said that training centers will continue to function for those who want to attend them at their own “free will”, with the right to come and go as they please.

US farm income

It’s fair to expect the mainstream media to spin stories of “despair” from US farmers but let’s focus on boring facts. The November report of the US Department of Agriculture passed somewhat unnoticed, but it showed that net farm income will rise to its highest level in almost 6 years:

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Keep in mind that most stories related to the plight of farmers that gain attention in the media are isolated incidents. Taken collectively, US farmers should not pose a threat to the chances of Trump’s re-election for a second term. This assumption can be strengthened further by considering YOY changes of un-aggregated net farm income which is the median income of an individual farm household (which is reasonable step given the assumption of high variance of incomes in the sector):

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As you can see, there is also a growth trend in 2019 - the median income of a farm household is projected at $76.191 thousand (+ 5.1% compared to 2018 in nominal terms).

However, the conclusion that farmers were not affected by the trade war would be false. A significant share of income is the federal program of direct support to farmers. According to forecasts, transfers to farmers will amount to 22.4 billion dollars (+8.7 billion compared to 2018). This is the maximum for the current decade. At the same time, the Trump program (Market Facilitation Program) will account for almost 64% of the total transfers in 2019:

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The ministry report can be found through this link: https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/highlights-from-the-farm-income-forecast/

Farm transfers data https://data.ers.usda.gov/reports.aspx?ID=17833

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