As predicted China retaliated this week against President Trump’s latest move to increase tariffs on $300 billion of Chinese goods effective Sept. 1.
China suspended the purchase of all U.S. agricultural products and threatens to place tariffs on agricultural goods purchased after Aug. 3. China has been purchasing fewer U.S. agricultural products. U.S. agricultural exports to China were $24 billion in 2014. Exports were $9.1 billion last year and estimated to decline this year. Soybeans are one of the most impacted commodities.
According to USDA’s Economic Research Service, China imported 8.7 million metric tons of soybeans from the U.S. between October 2018 and June 2019. This compares to the 16.3 million metrics tons imported during the same period last year.
The Department of the Treasury ratcheted up the trade war this week by listing China as a currency manipulator after China let its currency, the yean, depreciate. Treasury will now enter negotiations through the International Monetary Fund to adjust the rate of exchange which is required by the Omnibus Trade and Competitiveness Act of 1988. The last time the U.S. listed a country a currency manipulator was in 1994.
President Trump said today that he was not ready to make a deal with China and he didn’t know if the next round of negotiations scheduled for September would take place.
EU-U.S. beef agreement
President Trump announced that the European Union and the United States Trade Representative signed an agreement that will increase the amount of high-quality U.S. beef from non-hormone treated cattle going to the EU.
The agreement establishes a specific duty-free tariff rate quota for the U.S. The initial TRQ of 18,500 metric tons will increase over seven years to 35,000 metric tons. The new quota will increase annual sales of U.S. beef exported to the EU from $150 million to $420 million in seven years. Currently, the U.S. exports 13,000 metric tons with an estimated value of $150 million.
The European Parliament must vote on the agreement before it goes into effect. The vote is expected this fall.
Confusing food date labels
Consumers are confused by the various date labels (sell by, use by, expires on and freshest on) on food products. This confusion leads to consumers disposing of perfectly good food.
Representatives Chellie Pingree (D-ME) and Dan Newhouse (R-WA) have introduced the “Food Date Labeling Act” to help end consumers confusion on food date labeling and reduce food waste. The legislation establishes an easily understood food date labeling system. “BEST If Used By” means that the quality of the food product may begin to deteriorate after the date and “USE By” means the end of the estimated period of shelf life, after which the product should not be consumed. Food manufacturers will determine which food products will carry the quality date or discard date label.
Representative Pingree said, “Estimates indicate that around 90% of Americans prematurely throw out perfectly safe food, in part because of confusion about what date labels mean, meanwhile 38.4 million Americans are food insecure.” She went on to say, “With this piece of legislation, we can help ensure food is being used and eaten, rather than thrown out due to confusion.”
Senator Richard Blumenthal (D-CT) introduced a companion bill in the Senate.
Crop Insurance Caucus established
A bipartisan Congressional Crop Insurance Caucus has been established by U.S. Representatives Cheri Bustos (D-IL) and Glenn Thompson (R-PA). The purpose of the caucus is to work with stakeholders to educate Members of Congress and staff to understand the importance of crop insurance, issues facing crop insurance and increase bipartisan support for this farm safety net program.
Congresswoman Bustos said, “Farmers across the country are facing a tough economy, a reckless trade war and unpredictable weather conditions – they need to know Congress has their backs. Crop insurance should never be a partisan issue, and I’m proud to work across the aisle with Congressman Thompson to build support in Congress for our farm safety net.” Congressman Thompson said, “For the long-term success of American agriculture and our national food supply, it is critical that farmers and ranchers have access to voluntary tools to help manage that risk.”
The American Soybean Association, National Corn Growers Association, Ducks Unlimited and American Association of Crop Insurers support the establishment of the caucus.
President Trump’s FY ’20 budget proposed cutting $22 billion from crop insurance over a 10-year period.