Trade

Wall Street Journal writer Rebecca Ballhaus reported earlier this week that, “President Trump said Sunday the U.S. and Japan had reached a trade deal ‘in principle’ that would pave the way for more U.S. farm exports to Japan, while dropping the threat of increased U.S. tariffs on Japanese cars.”

Alan Rappeport and Keith Bradsher reported on the front page of Saturday’s New York Times that, “On Friday, China said it would increase tariffs on $75 billion worth of American goods, including crude oil, automobiles and farm products like soybeans, pork and corn in response to Mr. Trump’s plan to tax an additional $300 billion worth of Chinese goods in September and December.”

On Tuesday, the Trump administration announced that some recently announced tariffs on Chinese imports would be postponed until December.  And a report this week indicated that the ongoing trade war continues to be a factor impacting the soybean market.

Today’s update features recent news items that provide background information into the long running U.S., China trade war.  Articles highlighting the trade conflict’s impact on agriculture, including ramifications on markets and farm income, are also included.

The U.S., China trade war escalated this week as news articles reported that China has halted its purchases of U.S. agricultural products.

U.S. and Chinese officials held trade talks on Wednesday in China.  News reports noted that increased purchases of U.S. agricultural products were discussed, although no significant breakthroughs were announced at the conclusion of the meeting.  Additional talks are scheduled to take place in September.  Meanwhile, recent trade data shows that big agricultural purchases by China remain elusive; and on Thursday, President Trump announced additional tariffs on Chinese imports.

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.