Trade

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.”

A recent news article reported that Chinese imports of U.S. soybeans increased in February, contributing to a narrowing of the trade deficit between the two countries.  Nonetheless, the imports were significantly lower than last February.   Meanwhile, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin continued trade negotiations with China in Beijing last week.  Chinese Vice Premier Liu He travels to Washington, D.C. this week, as the talks continue.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are scheduled to travel to China next week to start a new round of face-to-face trade talks.  As the negotiations continue, many Corn Belt producers face substantial financial losses due to flooding in the Midwest.  The ongoing trade uncertainty and flooding come at time when the agricultural economy is struggling to rebound from its peak in 2013.

In testimony last week before the Senate Finance Committee, U.S. Trade Representative Robert Lighthizer displayed a more cautious tone in describing U.S., China trade negotiations.  Meanwhile, recent news items provided perspective on variables impacting the trade flows of soybeans and pork to China.

Last week, China purchased U.S. soybean and sorghum exports.  Nonetheless, farmers remained concerned about a trade resolution between the U.S. and China as more melancholy reports emerge about progress in the on-going negotations.

News articles this week reported that a trade deal between the U.S. and China could be close.  Meanwhile, Secretary of State Mike Pompeo provided additional trade perspective while visiting Iowa on Monday.  Today’s update looks at these developments in more detail.

On Friday, Bloomberg writers Joshua Gallu and Millie Munshi reported that, “President Donald Trump said he has asked China to immediately remove all tariffs on U.S. agriculture, including beef and pork, citing progress in trade talks between the two nations.”

U.S., China trade talks resumed last week in Washington, D.C., and extended into the weekend.  As the negotiations unfolded, Secretary of Agriculture Sonny Perdue indicated that China committed to buy an additional 10 million metric tons of U.S. soybeans.  And citing progress made in the talks, President Trump tweeted Sunday that, “I will be delaying the U.S. increase in tariffs now scheduled for March 1.”   News items tracking these developments are highlighted in today’s update.

After continuing last week in Beijing, U.S., China trade talks will resume again this week in Washington, D.C.  In addition, recent news items continue to highlight impacts of the ongoing trade dispute on the farm economy.  Today’s update focuses on these two issues in more detail.

China purchased more U.S. soybeans last week as trade negotiations between the two countries are set to continue this week in Beijing.  Meanwhile, a front page article in the Wall Street Journal last week pointed to signs of strain in the U.S. agricultural economy.  It appears that farmers will continue to deal with uncertainty on the trade front as 2019 unfolds.

As the U.S. and European Union trade negotiations unfold, the two sides have competing perspectives over what will be discussed:  The U.S. has included agriculture in its Summary of Specific Negotiating Objectives, while the EU has not.  Despite the discord, recent trade data indicates that the EU has purchased an increasing amount of U.S. soybeans.  Meanwhile, Bloomberg News reported Friday that Chinese negotiators made a “buying spree offer” during the U.S.-China trade discussions earlier this month in Beijing.

As he did last January in Nashville, President Donald Trump addressed the American Farm Bureau Federation’s Annual Convention in New Orleans on Monday.  Today’s update highlights news reports surrounding the President’s appearance at the convention.

As trade talks between the U.S. and China kicked off this week in Beijing, news reports pointed out that China “made their third large U.S. soybean purchase in the past month on Monday.”  The trade talks went a day longer than scheduled, and concluded with a statement that noted: “The talks also focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”  Meanwhile, a Financial Times article explored how the ongoing U.S.-China trade row is negatively impacting the U.S. farm sector.

A U.S. government delegation will travel to Beijing this week to discuss the ongoing trade war between the two countries.  A recent news article noted that optimism associated with the talks has been a contributing variable in a climb in the price of soybean futures.