Update on U.S – China trade talks

Bloomberg reported March 8, 2019 that President Trump was looking for China to drop all tariffs on agricultural products from the U.S.  Were the Asian nation to dump its 25 per cent retaliatory tariffs on soy -- America’s biggest agricultural export to China before the trade war – it could regain its position as the nation’s largest soybean supplier, displacing Brazil and Argentina.

 

Should China follow through on an offer to buy an extra $30 billion a year in American farm products, a raft of other countries could see their sales decline. That would likely include Canada’s shipments of canola and wheat. Australia’s agriculture minister has warned that any deal that’s unfair to other nations could end up at the World Trade Organization.

 

“Farm products are among the few options China has to help balance trade with the U.S.,” said Zhong Funing, a professor at the International Research Center for Food and Agricultural Economics at Nanjing Agricultural University. “We have to import more U.S. farm products while sacrificing other markets.”

 

While a deal has yet to be made, the two nations are close according to two people familiar with the discussions. The new target could see annual U.S. agriculture exports to China rise to about $55 billion to $60 billion, achievable in about three years, according to Rabobank International. That’s up from $24 billion in 2017.

 

Meanwhile on the U.S.- Canada trade front, American tariffs on steel and aluminum remain a sticking point. Prime Minister Trudeau spoke to President Trump on Mar. 1, 2019 to again press for them to be removed, but well-placed sources said there was little sign of progress, according to MSN.com.

 

U.S. agriculture secretary Sonny Perdue said that he was working hard to persuade Trump that the U.S. steel industry could be adequately protected by tariff rate quotas, rather than plain tariffs, on imports from Canada and Mexico. Canadian industry officials say they are opposed to the idea of quotas.

 

Agriculture interests, including several in fresh produce are pushing for adoption of the United States-Mexico-Canada Agreement (USMCA), but the recent U.S. government shut down has caused negotiations to slow.

 

Passing the USMCA is the “No.1 issue for us in Washington,” said Jim Bair, president and CEO of the U.S. Apple Association, which is one of many agriculture and business groups making up the USMCA Coalition.

 

Sources: Bloomberg https://bloom.bg/2VN53Fj, March 8, 2017

Produce Bluebook https://bit.ly/2VKuVlh, March 1, 2017

MSN.com https://bit.ly/2tWDX2B, March 1, 2019

 

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Friday, March 8, 2019

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