Farm Policy News

On Tuesday, Wall Street Journal writer William Mauldin reported that, “President Donald Trump’s top trade official wants to finish a renegotiation of the North American Free Trade Agreement by the middle of the month to get a revised pact to a vote in Congress by the end of this year.”

In addition to the concern expressed last week by Senate Agriculture Committee members to Agriculture Secretary Sonny Perdue regarding executive branch trade actions, recent news items continue to highlight the implications of ongoing trade disputes between the U.S. and China, particularly as it relates to sorghum and soybeans.

China recently announced anti-dumping measures on U.S. sorghum.  Meanwhile, potential action by China on U.S. soybeans continues to concern farm state lawmakers and agricultural producers alike.  Today’s update looks at recent news articles that explore these issues, and their potential implications, in greater detail.

On Monday, President Trump noted that ongoing trade turbulence with China could adversely impact U.S. agricultural producers already hampered by a sluggish U.S. farm economy.  The President has asked the U.S. Department of Agriculture for options to assist farmers negatively impacted by the recent trade developments.  Meanwhile, Secretary of Agriculture Sonny Perdue faced questions from farm state lawmakers about trade issues, and potential responses, at a Senate hearing on Wednesday morning.

Today’s update includes a brief explanation of recent trade tariff action taken by the U.S. and China.  The trade uncertainty unfolds as agricultural producers anticipate another year of stagnant farm income, and while robust production of corn and soybeans in recent years has made exports an important component of demand.  Overall, USDA has noted that agricultural exports account for 20 percent of U.S. farm income.  Meanwhile, President Trump has instructed Secretary of Agriculture Sonny Perdue to “implement a plan to protect our farmers and agricultural interests” as the trade tussle continues.

Since withdrawing from the Trans-Pacific Partnership on his first working day in office, and formally opening the North American Free Trade Agreement to the renegotiation process, President Trump’s rhetoric on trade has perhaps caused more anxiety among agricultural producers than actual executive branch action.  However, implementation of concrete trade policy from the Administration began to emerge in January of this year when the U.S. slapped tariffs on imports of solar panels and washing machines.

A recent report from CoBank pointed out that trade worries are clouding the economic outlook for U.S. farmers and ranchers.  And, a recent report from Purdue University demonstrates that potential trade retaliation measures on U.S. soybeans by China could be costly.  Today’s update looks briefly at these two reports, as well as other news articles that highlight ongoing trade issues in the farm sector.

Charles Clover, Lucy Hornby and James Kynge reported on Friday at The Financial Times Online that, “Beijing signalled its readiness to go toe-to-toe with US President Donald Trump’s campaign of tariffs against China on Friday, proposing new levies on 128 American imports that heightened market fears of a looming trade war between the world’s largest economies.  China’s response to Mr Trump bore the hallmarks of a carefully calibrated warning. Beijing said it was planning tariffs on about $3bn in imports, including a 15 per cent tariff on US steel pipes, fresh fruit and wine, and a 25 per cent tariff on pork and recycled aluminum.”

The Wall Street Journal reported on Wednesday that, “China is preparing to hit back at trade offensives from Washington with tariffs aimed at President Donald Trump’s support base, including levies targeting U.S. agricultural exports from Farm Belt states, according to people familiar with the matter.”