Trade

Bill Northey, the USDA Under Secretary for Farm Production and Conservation, was a guest on Monday’s “Adams on Agriculture” radio show with Mike Adams, where the conversation focused on the latest round of Market Facilitation Program (MFP2) payments to farmers.

As U.S., China trade negotiations continue this week in China, recent news articles have discussed Chinese imports of U.S. soybeans, as well as the prospect of additional Chinese purchases of U.S. farm goods.  Today’s update highlights some key points from a few of these business news articles.

Recall that back in May, the Trump administration announced a new $16 billion trade aid package for U.S. farmers harmed by the ongoing trade conflict with China.  In early June, the U.S. Department of Agriculture released additional details associated with the program.  On Thursday, many final points of the program were made available.  Today’s update highlights some of these additional program details.

Despite Chinese tariffs on U.S. pork, dynamics associated with the African Swine Fever (ASF) outbreak have created market opportunities for pork exports to China.  In addition, Chinese beef imports surged in June, also due to changing protein demand spurred by the impacts of ASF.  Separately, news this week documented that U.S. cotton exports to China have fallen, along with domestic prices, while stocks climb.  And news on Tuesday indicated that senior U.S. officials are planning to travel to China next week to continue trade negotiations in person.

Since U.S., China trade negotiations resumed late last month, conflicting perspectives have emerged with respect to China’s promise to purchase large amounts of U.S. farm products.  Today’s update highlights recent news reports that discuss developments in U.S., China trade talks, as well as the issue of Chinese agricultural purchases.

Recent news reports have noted that U.S., China trade negotiations have been revived, but that China has yet to move forward with large U.S. agricultural purchases, as promised by President Trump.  Separately, news items last week also discussed recent U.S. agricultural export data.

On Thursday, the Senate Agriculture Committee held a hearing titled, “Certainty in Global Markets for the U.S. Agriculture Sector.” Lawmakers discussed the USMCA, the ongoing trade negotiations with China, and sought additional details on the Administration’s second round of trade mitigation payments for farmers, which was announced last month.  Recall that a House Agriculture Subcommittee held a trade related hearing on Tuesday.

On Tuesday, the House Agriculture Livestock and Foreign Agriculture Subcommittee held a hearing highlighting agricultural trade issues. Lawmakers discussed the USMCA, the ongoing trade negotiations with China, and the impact that trade conflicts are having on U.S. farmers.  Meanwhile, recent news articles have discussed the potential progress of trade related legislation.

Recent news articles point to a feeling of unease among U.S. farmers regarding President Trump’s threat late last week to impose import tariffs on Mexican goods.  Mexico is a top export market for U.S. corn and pork, and additional complications with ratifying the USMCA trade pact are unwelcome while trade negotiations continue with China, the European Union, and Japan.  Meanwhile, the U.S. Department of Agriculture released its quarterly projections for U.S. agricultural trade last week.  Today’s update highlights these issues in greater detail.

Today’s update reviews recent news articles that highlight two important trade issues impacting U.S. farmers: China’s imports of U.S. soybeans, and the likely ratification of the USMCA Agreement with Canada and Mexico. President Trump added a wrinkle to the USMCA issue Thursday evening by threatening to implement escalating tariffs on all Mexican imports beginning June 10.  Recall that Canada and Mexico are the two largest U.S. agricultural export markets, while China ranks fifth.  

Wall Street Journal writer Josh Zumbrun reported on Thursday that, “The Trump administration said it would spend $16 billion to offset the impact on American agriculture from the trade conflict with China, with most of the money taking the form of direct payments to U.S. farmers.”

Executive branch policy action last week resulted in some very welcome good news for U.S. agriculture.  Metal import tariffs on Canada and Mexico were lifted, improving the outlook for the USMCA Agreement, and a decision to apply U.S. tariffs on cars from the EU and Japan was postponed.  Also last week, Secretary of Agriculture Sonny Perdue announced a breakthrough agreement opening additional U.S. beef exports to Japan.  Nonetheless, recent news reports document that trade issues, particularly with China, continue to suppress the outlook for U.S. farmers.

The U.S., China trade dispute escalated this week, weighing on some agricultural markets.   Meanwhile, news reports indicate that the executive branch is working on additional trade aid for farmers negatively impacted by the ongoing dispute.  Today’s update highlights these issues in more detail.

Last week, the United States made good on a threat to increase trade tariffs on China.  Some agricultural markets roiled on the news, and President Trump offered policy assistance to U.S. farmers in a series of Tweets on Friday morning.  Today’s update looks at these issues in greater detail.

Reuters writers Jeff Mason and David Shepardson reported this week that, “President Donald Trump dramatically increased pressure on China to reach a trade deal by announcing on Sunday he would hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.”

Today’s update briefly reviews recent news articles highlighting executive branch action relating to China, the USMCA (Canada and Mexico) and Japan.  In addition, news articles documenting current strain in the U.S. agricultural economy, where ongoing disputes may be a contributing factor, are also included.

Earlier this month, the USDA’s Economic Research Service (ERS) published an article (“Southeast Asia’s Growing Meat Demand and Its Implications for Feedstuffs Imports,” by Tani Lee and James Hansen) which explained that, “Southeast Asia’s rising incomes, growing population, and increasing urbanization have contributed to growth in livestock production and meat consumption, particularly poultry and pork.”

Recent news developments point to a potential timeline for ongoing U.S., China trade negotiations.  More narrowly, articles have also discussed agricultural variables that have arisen in the talks; and as the trade war persists, farmers are feeling unease about the potential outcome.  Meanwhile, tariffs continue to impact the flow of soybean exports.

Late last week, Los Angeles Times writer Don Lee reported that, “Despite hopes that a U.S.-China trade deal is at hand, President Trump said Thursday that some key issues have yet to be resolved and that they are not close enough for him to announce a summit with Chinese President Xi Jinping.”