New U.S. Tariffs Ramp-Up Fear of Ag Trade Retaliation; Soybean Growers Especially Worried

On Thursday, President Trump implemented tariffs on steel and aluminum, an action that had been anticipated since last week.  Today's update explores recent news items that highlight the potential negative impact the executive branch action could have on the U.S. farm sector.  Although Canada and Mexico were exempt from the new tariffs, if other countries, particularly China, take retaliatory trade measures based on U.S. trade policy, negative short-term and long-term impacts could be expected for U.S. farmers.
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Trade Complications: President Signals Steel and Aluminum Tariffs Bargaining Chips in NAFTA Renegotiations

Wall Street Journal writer William Mauldin reported on Monday that, "President Donald Trump on Monday sought to use his threat to slap tariffs on steel and aluminum imports as leverage to extract concessions from North American trading partners, while his party’s congressional leaders worked to derail a proposal that they said could spark a trade war."
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Trade Retaliation Measures Could Hurt U.S. Farm Sector

A FarmPolicyNews update last month discussed executive branch implementation of U.S. import tariffs on solar panels and washing machines, as well as the possibility of future implementation of import barriers on steel and aluminum.  That update also included a look at the potential of retaliatory measures, particularly by China, that could have a negative impact on U.S. agricultural exports and farm income.  On Thursday, President Trump signaled that he plans to levy the tariffs on steel and aluminum imports soon.  Today's update looks at recent news items that highlight the negative impact trade retaliation measures could have on U.S. agriculture if the President follows through on his import tariff promise.
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Farm Groups Concerned About Additional U.S. Trade Restrictions- China Agricultural Retaliation

Following the implementation of U.S. import tariffs on solar panels and washing machines, more recent news regarding potential executive branch trade barriers imposed on steel and aluminum imports have caused concern among some American agricultural groups.  China is a leading producer of solar panels and steel, and is also a key export destination for U.S. agricultural exports.  As U.S. farm income potentially languishes for another year, export markets have become increasingly important to the value of U.S. crop production.  Some observers have cautioned that agricultural products could be targeted by China in retaliation for additional U.S. trade restrictions.
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House Ag Committee Hearing with Sec. Perdue: Trade Issues

Secretary of Agriculture Sonny Perdue testified before the House Agriculture Committee on Tuesday morning  at a hearing on the “State of the Rural Economy.”  Recall that back in May, shortly after his confirmation, Sec. Perdue also provided lawmakers on the Committee with an update on rural economic issues.  Trade issues with China and the ongoing renegotiation of the North American Free Trade Agreement (NAFTA) were among the key concerns that emerged on Tuesday.
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Trade Update: Trans-Pacific Partnership (TPP), China, and NAFTA

Jacob M. Schlesinger reported on Tuesday at The Wall Street Journal Online that, "Eleven Pacific Rim nations agreed to forge a new trade bloc [TPP] that excludes the U.S. on Tuesday, as President Donald Trump signed an order to block certain cheap Asian imports [Chinese makers of solar panels and South Korean producers of washing machines], illustrating the battle lines of a new global trade climate."
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Kansas City Fed Ag Outlook- Robust Corn, Soybean Production Make Exports Increasingly Important

Cortney Cowley, an economist at the Federal Reserve Bank of Kansas City, indicated in an update last week ("As Winter Looms, Key Risks Keep Ag Outlook Cool") that, "Following steep declines for three consecutive years, farm income was expected to stabilize in 2017 and beyond. In inflation-adjusted dollars, real net farm income was forecast to be relatively unchanged from 2016."
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