Tag Archives: Trade

China’s latest shot in a tit-for-tat trade war is a World Trade Organization Complaint over U.S. solar tariffs. China filed a complaint with the WTO to help determine the legality of the U.S. policies, saying they not only harm China’s rights but also undermine the WTO’s authority, according to Reuters.

China says the U.S. tariffs and the U.S. “decision to subsidize renewable energy firms” has distorted the global market. The Trump administration in January announced it was imposing “Safeguard tariffs” over four years, with a 30 percent tariff in the first year reduced gradually to 15 percent in year four.

The action, however, is not expected to have an immediate impact on China’s major solar manufacturers, as their exposure to U.S. markets was reduced after earlier trade disputes. One Chinese executive told Reuters that U.S. solar tariffs were a “sideshow” and had little effect on Chinese business.

China threatens that U.S. agriculture won’t recover from the tit-for-tat trade war between the two countries. In the South China Morning Post, a government official warned that U.S. agriculture may never regain lost market share stemming from the trade war. China alleges that “many countries have the willingness” and capacity to take over market share occupied by U.S. goods.

Since the trade war began, China has imposed duties on 90 percent of agricultural goods from the United States. China charges that addition tariffs will cause “a great decrease” in exports from the U.S. with “limited impact” on China due to diversified import sources.

China’s vice agriculture minister also claimed that Chinese companies had “basically stopped” importing soybeans from U.S. farmers and would deal with the impact by finding alternative ingredients for animal feeds. China is the world’s biggest importer of soybeans, which it uses to make cooking oil, biodiesel and livestock feed.

Procurement and quality assurance officials from four Japanese commercial feed millers visited the Council’s headquarters office in Washington, D.C., late last month for an annual corn quality information exchange meeting.

In addition to Council staff, representatives from the U.S. Department of Agriculture’s Federal Grain Inspection Service (USDA’s FGIS) and North American Export Grain Association (NAEGA) participated.

“This annual quality meeting is important to show appreciation for our Japanese customers,” said Tommy Hamamoto, USGC director in Japan. “Even though Japanese industry officials noted the presence of rocks, dust and low protein as issues for U.S. corn, they did not seem to have to point out serious issues such as mycotoxins and noted they were generally satisfied with the quality of U.S. corn.”

Earlier this year, the Council received reports of stones the size of corn kernels in shipments to Japan, which had to be picked out by hand because they could not be removed by sieves before going to roller mills.

The report served as an important reminder of how foreign material – including non-grain plant materials and other objects – inadvertently mixed with corn cargoes can undermine the reputation of U.S. grains. The U.S. grain supply chain as a whole must continue to pay attention to good handling practices, from seed development and equipment design to storage and transportation.

“It is important to hear the Japanese industry’s concerns, like the presence of rocks, to maintain the level of confidence in U.S. corn,” Hamamoto said. “In that regard, it is especially important to continue this annual meeting, even in years where there are no specific quality concerns.”

USGC staff in Japan and other markets globally talk regularly with customers about quality to hear their perspectives and share information about the U.S. grading and export systems.

Japan ranked as the second largest buyer of U.S. corn in 2016/2017, increasing imports nearly 30 percent year-over-year to the highest levels in nearly a decade at 13.5 million tons (nearly 533 million bushels). Japan also nearly doubled U.S. sorghum purchases to 183,000 tons (7.19 million bushels), the third largest buyer.

(Washington, DC, August 7, 2018) – U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue announced today that the government of Morocco has agreed to allow commercial imports of U.S. poultry meat and products into Morocco for the first time.

“The Trump Administration continues to prioritize the opening of new markets for U.S. agricultural products.  This new access to the Moroccan market is an important step in ensuring that American farmers and ranchers can continue to expand their exports,” said Ambassador Lighthizer.  “I welcome Morocco’s agreement to allow imports of U.S. poultry meat and products and the economic opportunities that will be afforded to U.S. producers.”

“Opening new markets for American poultry and other agricultural products is a top priority. I am convinced that when the Moroccan people get a taste of U.S. poultry, they’re going to want more of it,” said Secretary Perdue. “The products that will be imported into Morocco are safe, wholesome, and very delicious. This is also a good harbinger of the kind of relationship that can be developed. We hope there are other things we can cooperate on as USDA works to expand markets around the globe.”

The United States is the world’s second largest poultry exporter, with global sales of poultry meat and products of $4.3 billion last year.  In May 2018, U.S. exports of agricultural products exceeded $12 billion (latest data available). Initial estimates indicate that Morocco would be a $10 million market, with additional growth over time.  Morocco had prohibited imports of U.S. poultry.  Officials from the Office of the U.S. Trade Representative and the U.S. Department of Agriculture worked with the Moroccan government to provide assurances on the safety of U.S. poultry.

More details on requirements for exporting to Morocco are available from the USDA Food Safety and Inspection Service Export Library at:  https://www.fsis.usda.gov/wps/portal/fsis/topics/international-affairs/exporting-products/export-library-requirements-by-country/Morocco.

Washington, D.C.— Returning to Washington just weeks after their July Board of Directors meeting, grower leaders from the American Soybean Association (ASA) met again with officials at the U.S. Department of Agriculture (USDA) and Members of Congress to consider options for offsetting the long-term damage from China’s retaliatory tariff on American soybeans.

John Heisdorffer, a soy grower from Keota, Iowa, and President of ASA said, “We know that President Trump is aware of how hard this is hitting agriculture and specifically soybeans. The recent announcement that the European Union has agreed to buy more U.S. soybeans is a welcome step. Given the scale of potential damage from the tariff, we need more market-opening measures if we are going to survive the long-term repercussions on soybean exports.”

“We are asking, first, that Congress pass a new long-term farm bill that increases funding for export promotion under MAP and FMD. The Trade Promotion Program announced by USDA last month will supplement these much-needed efforts, and we hope to see this funding extended over a multi-year period so that activities can be coordinated with the Congressionally-mandated programs.”

In addition to asking Congress to pass the Farm Bill, ASA grower leaders urged the House Ways and Means Committee and Senate Finance Committee to support negotiation of new free trade agreements. ASA is asking that NAFTA be in place by the end of 2018, and that bilateral FTAs be initiated with Japan and other countries that offer increased markets for soy and livestock products. ASA also asked lawmakers to support funding to upgrade inland waterways infrastructure in order to maintain the U.S. competitive advantage.

“We need these tools,” said Heisdorffer. “The certainty and stability of our industry depends on, number one, getting these tariffs removed as quickly as possible and, number two, taking steps now to offset the damage done by this trade war by negotiating trade agreements and funding programs essential to opening new markets for our farm products.”

China imported 31% of U.S. production in 2017, equal to 60% of total U.S exports and nearly 1 in every 3 rows of harvested beans, which makes expanding existing and finding new markets crucial for the U.S. soybean industry.

Denver – Navigating the new global trade landscape while maintaining and strengthening relationships with key partners, including Mexico and China, was front and center as the U.S. Grains Council’s 58th Annual Board of Delegates Meeting beganMonday in Denver.

The meeting kicked off with keynote speaker Ambassador Carla Hills, a former U.S. Trade Representative, who shared her perspective on how agriculture fits in today’s global trade puzzle.

“Global trade is the most effective development tool we have,” Hills said. “It enlarges economic opportunities for poor countries. It is not just a humanitarian effort; it createstomorrow’s trade partners. One might call it an act of enlightened self interest.

“But these are turbulent times. The U.S. government has always used diplomacy to advance the well-being of our own nation, but it worries me…that we are turning inward.”

Hills, now chair and chief executive officer of Hills and Company International Consultants, served as USTR as a member of President George H.W. Bush’s Cabinet. In that role, she negotiated and concluded the North American Free Trade Agreement (NAFTA).

“Knowing what NAFTA accomplished is critical to making sound decisions about the agreement. Today, 14 million jobs depend on trade with Mexico and Canada. Today, one-third of our total global trade is with our northern and southern neighbors. Our agricultural exports to Canada are up 300 percent and Mexico is up 500 percent. Last year, we sold 14 million tons of corn to Mexico,” Hills told the audience of farmers and agribusiness delegates.

“Hopefully, we can find a way to resolve this tariff battle before it grows into a full-fledged tariff war and complete the NAFTA renegotiation that means so much to our economy,” she said. “Once those customers are lost, they will be difficult to recover. We have no time to waste.”

Before Hills spoke, Colorado Commissioner of Agriculture Don Brown, an active member of the Colorado Corn Growers Association and the National Corn Growers Association, welcomed USGC members and delegates to Denver.

Zhenglin Wei, counsellor for Agricultural, Economic and Commercial Affairs for the Embassy of the People’s Republic of China, spoke during the same session about the status and future of the U.S.-China agricultural and trade relationship. He said the current tensions are worrisome because trade between the two countries is beneficial for the well-being of the two countries and the prosperity and stability of the world economy.

Dan Pearson, principal at Pearson International Trade Services and former chairman of the U.S. International Trade Commission (ITC), addressed the current political environment regarding global trade, especially regarding NAFTA and China trade relations and the economics of better trade policies.

Erich Kuss, director of USDA’s Foreign Agricultural Service (FAS) Agricultural Trade Office in Mexico City, offered an update on the current agricultural trade environment and political situation in Mexico after the recent election of Mexican President-Elect Andres Manuel Lopez Obrador.

Attendees also heard a lunchtime update from Brian Kuehl, executive director of Farmers for Free Trade, who discussed the importance of rebuilding U.S. consensus among farmers and ranchers for trade and activities of that coalition.

More from the meeting is available on social media, using the hashtag #grains18.

Following the president’s announcement of a $12 billion trade assistance package to farmers, the nation’s bankers echoed farmer sentiments, and said producers want free trade, not handouts.

A Farm Journal report quoted ag lender Alan Hoskins, as having said, it’s far too soon to know how beneficial the aid will be. Hoskins did stated one thing is clear; it’s not what farmers want.

“They want to be able to turn a profit by selling their grain,” Hoskins said, “and not by getting government handouts.” Hoskins added cash flow is going to be very tight this year, which will lead to some difficult conversations between producers and lenders.

However, he said it’s not something to be feared by producers, but rather it’s an opportunity to sit down and work together to figure out something that will benefit farmers.

Illinois producer Michael Cox tells Farm Journal that the aid package is just a temporary fix, at best, because there are too many questions about the program.

Hoskins said many farmers are wide open to market volatility at this point and those payments will come in handy.

The European Union says that the proposed trade talks with the United States wouldn’t include farming. The website Business Times Dot Com says this directly contradicts what President Donald Trump said.

An EU Commission spokeswoman said they’ve been very clear on that fact. The spokeswoman added that agriculture is not part of it, only the things that were specifically mentioned in the statement that came out July 26.

“The joint statement shows no mention of agriculture, as such you’ll see a mention of farmers and a mention of soybeans, which are part of the discussion,” said Mina Andreeva, EU commission spokeswoman. “That is part of the discussion and we will follow up on that.”

The EU clarification was released July 27, one day after the president called the agreement a “major victory for U.S. farmers,” who’ve seen plummeting exports due to Washington’s trade policies. Trump told a rally in Iowa that “We’ve just opened up Europe for you farmers.” The EU may be feeling pressure to emphasize that there was no farming concession made to Trump because of opposition in Europe to more genetically modified imports from America.

Washington, D.C. – On Wednesday, Congressman Adrian Smith (R-NE) joined 21 of his Ways and Means colleagues in sending a letter to President Trump, urging him to meet directly with President Xi of China to resolve the ongoing trade dispute.

 

From Rep. Smith:

 

“Just yesterday, President Trump came together with European Commission President Jean-Claude Juncker to announce a framework for reducing tariffs and other trade barriers between the United States and European Union. President Trump should also meet directly with President Xi to encourage China to cease its negative behavior and bring an end to the trade dispute between our two countries. American manufacturers and producers have been harmed by China’s unfair trade practices, and these issues must be addressed.”

 

The letter can be downloaded here and its full text is below:

 

Dear President Trump:

We are writing to urge you to meet directly with President Xi to begin crafting an historic new solution on trade that levels the playing field between China and the United States for U.S. farmers, workers, and businesses.  We are confident that if you personally engage with President Xi, you would reinvigorate the negotiations and develop meaningful solutions that will establish free, fair, and lasting trade between the United States and China and improve the competitiveness of U.S. companies.  Senior officials in your Administration have gone to great lengths to meet with Chinese officials, but it appears that there are no serious trade discussions underway or currently scheduled that could lead to a solution.

We strongly agree with the conclusions that you and your Administration have made in the recent Section 301 Report that China engages in a wide range of unfair and distortive trade practices harming U.S. companies, farmers, and their employees.  These practices include subsidies and other unjustified government support that have led to severe overcapacity in China’s steel, aluminum, and other sectors.  These inequitable practices also include the theft of U.S. intellectual property, forced technology transfer, and licensing policies that you and your Administration have identified.  We are pleased that you are committed to addressing these challenges to compel change to China’s unfair practices so that U.S. companies can compete on a level playing field.

Our shared objective is long-term and enduring reform in Chinese subsidies, tariffs, and other trade barriers.  While tariffs cause short-term economic pain to China, they also boomerang on American companies, farmers, workers, and consumers – and we hear every day from Americans who are caught in a destructive cycle of escalation.  A lasting solution can be established only through fundamental change to the Chinese system.  Timely and astute negotiations under your leadership are essential to accomplishing this goal.

To your credit, you have developed a strong personal relationship with President Xi.  We are confident that this background can provide the platform for tough, candid, and pragmatic discussions with President Xi about solutions for China to reform its unfair trade practices and reduce unacceptable barriers to U.S. trade and investment in China.  The stakes are high but the opportunity is upon us.

We recognize that all too often China has refused to discuss the fundamental changes that are needed to establish a trade relationship that is fair for America.  We are confident that you have China’s attention on these issues and that you have the ability to negotiate an ambitious and enforceable agreement.

We look forward to working with you in the very near future to accomplish this bold but necessary goal.

WASHINGTON – U.S. Senator Jerry Moran (R-Kan.) spoke on the Senate floor regarding the importance of trade to Kansas and his concerns with tariffs and escalating a trade war. In addition, U.S. Trade Representative Robert Lighthizer this morning testified before Sen. Moran’s Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies. To watch Chairman Moran’s opening statement, click here.

Click Here to Watch the Full Remarks

“The significant harm the trade war is causing to farmers and ranchers is no doubt the reason the administration is proposing $12 billion in disaster relief for agriculture,” said Sen. Moran.“Unfortunately, it is only a short-term fix to a long-term problem and will not make up for lost markets for farmers.”

China and Mexico – two of the largest markets for Kansas producers – have already started to increase purchases of ag commodities from Brazil and Argentina, instead of from U.S. producers,” Sen. Moran continued. “I’m concerned that once we lose those markets, it will take years, if ever, for us to get those markets back. This hit could not come at a worse time for ag producers – farm revenue has already fallen by over 50 percent since 2013. Low commodity prices have pushed many producers to limits of financial viability.”

 

Sen. Moran’s full remarks as prepared for delivery:

 

“I rise today to speak about the importance of trade to Kansas and about my concerns with tariffs and escalating a trade war. A global trade war will raise the price of goods for American consumers; result in retaliation against farmers, ranchers and manufacturers who depend on exports; and weaken our ability to work with our allies to challenge China’s unfair trade practices.

“Kansans are already feeling the effect of the tariffs. Approximately $361 million worth of Kansas exports are being targeted in the emerging trade war, including soybean and sorghum exports to China, aerospace exports to Canada, and beef and corn exports to Mexico. Moving forward with another $200 billion or $500 billion in tariffs against China, or new section 232 tariffs on automobiles for supposed national security concerns, will only increase the negative impact on Kansas. With 95 percent of consumers living outside our country’s borders, the ability for Kansas farmers and ranchers to earn a living is directly tied to our ability to sell the food, fuel and fiber we grow to people around the globe.

“Since March, uncertainty in trade has contributed to the price of soybeans falling by $2 per bushel. A $2 drop in soybean prices equates to Kansas farmers and grain handlers losing out on about $378 million of possible revenue solely on soybeans. The significant harm the trade war is causing to farmers and ranchers is no doubt the reason the administration is proposing $12 billion in disaster relief for agriculture. Unfortunately, it is only a short-term fix to a long-term problem and will not make up for lost markets for farmers.

“China and Mexico – two of the largest markets for Kansas producers – have already started to increase purchases of ag commodities from Brazil and Argentina, instead of from U.S. producers. I’m concerned that once we lose those markets, it will take years, if ever, for us to get those markets back. This hit could not come at a worse time for ag producers – farm revenue has already fallen by over 50 percent since 2013. Low commodity prices have pushed many producers to limits of financial viability. I wrote an op-ed this spring arguing that Kansas farmers and ranchers can’t afford a trade war. Now, with fall harvest around the corner, many farmers will be faced with the reality of selling grain at or below the cost of production, just to be able to pay off this year’s operating loans.

“The impact of the downturn in the ag economy cannot solely be quantified on a balance sheet. I’m concerned that reduced economic opportunity in agriculture will result in fewer young people returning to rural America. Because when agriculture struggles, so do our rural communities. As the average age of a farmer nears 60 years old, it is critical that our policies increase the likelihood that a young person is able to return home to take over a family farm or ranch.

“I fear the trade war and tariffs will unfortunately have the opposite effect – fewer markets to sell meat and grain will make it more difficult for the next generation to earn a living in rural America. Kansas manufacturers are also dealing with the negative impacts of recently imposed tariffs. Users of steel and aluminum are facing increased cost for materials, regardless of whether they utilize domestic or imported steel and aluminum.

“Chanute Manufacturing in Chanute, Kansas is a perfect example of the steel and aluminum tariffs harming small companies and workers. The company, which employs about 130 Kansans, is a domestic manufacturer of steel-based components for the power generation market. Due to the tariffs, Chanute’s cost for raw material has increased by about eight percent. However, when the same power plant equipment is manufactured overseas, it can be imported tariff-free. So, the actual, unintended consequence of the steel tariff has been to incentivize foreign manufacturing of power equipment currently made in Kansas. Chanute Manufacturing has also missed opportunities to compete for projects in other countries due to these tariffs. Last year, the company built and shipped equipment it manufactured in Kansas to Morocco. However, when a duplicate project came available in Morocco again this year, Chanute wasn’t even considered because the steel tariffs have raised their production costs, making them less competitive than cheaper, foreign manufacturers.

“Tariffs are not the only tool to make certain other countries follow international trade rules and treat American exporters and workers fairly. I support efforts to hold China accountable for unfair trade practices, and the theft of trade secrets and intellectual property rights from American companies. I applauded the U.S. for filing a challenge to China’s domestic agricultural support levels at the World Trade Organization. When China unfairly subsidizes its producers or limits market access of U.S. wheat, corn and rice, the U.S. is right to contest them.

“While I remain unconvinced that tariffs are the best tool to change China’s behavior, it does not mean we should not pursue strong enforcement of global trade rules. I’m also concerned that picking a fight on trade with the rest of the world reduces our ability to win the fight with China – the country most deserving of strong trade actions from the United States. By attempting to take the whole world on at once, the U.S. risks spreading our resources thin; thus, reducing our focus on changing China’s trade practices. The U.S. is not the only country with complaints about China’s trade practices. Yet, instead of working with allies to influence China and change their behavior, we’ve forced confrontations with other countries who ought to be by our side in dealing with China. I believe that by strengthening our trade and economic relations with our allies, the U.S. will be better able to continue directing sound trade policy on the global stage. This includes successfully concluding NAFTA renegotiations with Canada and Mexico and re-engaging in TPP negotiations or pursuing bilateral agreements with countries in TPP, such as Japan.

“This week, Ambassador Lighthizer will be testifying before the Appropriations subcommittee I chair, the Commerce, Justice and Science Appropriations Subcommittee, which oversees funding for the Office of the U.S. Trade Representative. The hearing will be an opportunity for the subcommittee to hear firsthand from Ambassador Lighthizer on USTR’s trade efforts and to express concern about the impact the tariffs have had – and will continue to have – on our constituents. I hope to learn more about the administration’s strategy and end goal in threatening more tariffs, progress to conclude NAFTA negotiations and efforts to fulfill the president’s call for new bilateral trade agreements.

“Again, recently-imposed tariffs are having immediate effects on farmers, ranchers and manufacturers, but the long-term implications of disrupting supply chains and losing market shares that took decades to build up is perhaps even more concerning. It is time to inject more certainty into our trade policies. We ought to start by reaching an agreement on a modernized NAFTA and ending the threat of escalating a trade war. I look forward to the conversation with Ambassador Lighthizer this week and making certain the administration understands the importance of getting trade policy right for Kansas.”