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U.S. continues negotiations with China. Bet_Noire-GettyImages

U.S. continues negotiations with China

Legislative Watch: U.S. will not immediately lift tariffs on China; Trump wins tariff court case; EU trade agreement must contain agriculture; food inflation down.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are leading the U.S. delegation this week in Bejing to continue negotiations on resolving the U.S.-China trade war. China’s lead trade negotiator, Vice Premier Liu He, will be in D.C. beginning on April 3 to continue the negotiations.

One of the issues that will need to be addressed is tariffs. President Trump said the U.S. will not immediately lift tariffs on the $250 billion of Chinese goods, even if the U.S. and China reach an agreement. He wants the tariffs to remain in place to ensure that China abides by the terms of any agreement.   

Last week, China purchased 300,000 metric tons of U.S. corn. This is the largest corn purchase since October 2013. Earlier this month, China purchased 23,800 metric tons of U.S. pork which was the largest weekly purchase since April 2017. 

Trump wins tariff court case
The U.S. Court of International Trade handed President Trump a victory when it ruled his use of a national security justification to impose tariffs on steel and aluminum was constitutional. 

The American Institute for International Steel sued the administration arguing that the president exceeded his authority when he justified “national security” under Section 232 of the Trade Expansion Act for imposing tariffs. 

The Court said in its ruling “Identifying the line between regulation of trade in furtherance of national security and an impermissible encroachment into the role of Congress could be elusive in some cases because judicial review would allow neither an inquiry into the president’s motives nor a review of his fact-finding.”

The AIIS announced it will appeal the case to the U.S. Supreme Court.

Ag must be part of any EU trade agreement
A bipartisan group of 114 Congressional members are insisting that agriculture be a part of any trade agreement between the U.S. and the European Union. The members wrote USTR Ambassador Robert Lighthizer in support of keeping agricultural products as a key negotiating objective in any proposed trade agreement with the EU.

In a letter to Lighthizer, the members wrote, “As you know, agriculture is the source of a great number of trade barriers and irritants in the U.S.-EU trading relationship. Thus, an agreement with the EU that does not address trade in agriculture would be, in our eyes, unacceptable. We want to voice our strong support for the inclusion of agriculture in the upcoming discussions and to reiterate that an agreement that fails to include agricultural products would be deficient, significantly jeopardizing Congressional support.”

Last December, a number of agricultural organizations applauded Lighthizer’s efforts to include agriculture in any trade agreement with the EU. The EU continues to say that agriculture will not be a part of a U.S.-EU trade agreement.

Food inflation down
USDA’s Economic Research Service is estimating that retail food prices will increase around 1% for 2019. The average annual increase for retail prices over the past 20 years has been 2%. 

Various products are expected to have lower prices this year including pork, eggs, fats and oils, fresh vegetables, and processed fruits and vegetables. Retail pork prices are expected to decrease between 2 and 3% this year.

Prices for beef, fish and seafood, sugars, and sweets are expected to increase in 2019. However, the increase is estimated to be less than historical averages. Beef and veal are estimated to increase 2 to 3%.

Food purchases at restaurants are estimated to increase between 2 to 3% for 2019. 

Source: P. Scott Shearer, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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