More tariffs on Chinese goods

Legislative Watch: More tariffs on Chinese goods; Japan, U.S. meeting on trade; tougher Mexican border inspections; easing Chapter 12 limits; Conaway retiring.

P. Scott Shearer, Vice President

August 2, 2019

4 Min Read
Illustration of U.S. and Chinese ships sinking
Getty Images/wildpixel

President Trump announced he plans to impose a 10% tariff on $300 billion of Chinese imports that currently do not face U.S. tariffs. The tariffs are to go into effect on Sept. 1. The items targeted would include clothes, toys, electronics and other retail goods; having a direct impact on U.S. consumers.

China plans to retaliate but gave no indications of how or when. A Chinese foreign ministry spokesman says, “China will not accept any form of pressure, intimidation or deception. We will not give an inch on important issues of principle. We are open to talks, but they have to be conducted in a mutually respectful manner. The U.S. has to show credibility and sincerity to continue the talks.”

This latest escalation in the trade war comes just after two days of meetings where the United States and China agreed to continue trade negotiations with face-to-face meetings in September. These were the first trade talks since they ended in May.

The White House released a statement after the negotiations in China saying, “The two sides discussed topics such as forced technology transfer, intellectual property rights, services, non-tariff barriers and agriculture. The Chinese side confirmed their commitment to increase purchases of United States agricultural exports.” There were no details provided by the White House regarding the timeline and what agricultural products the Chinese would be purchasing.

The Chinese in their statement had a different interpretation saying, there were discussions of China increasing its purchases of U.S. agricultural products “according to its own domestic needs and favorable conditions to be offered by the U.S. side for the purchase.”

President Trump earlier this week indicated the negotiations could carry on for an extended length of time, possibly until after next year’s presidential election.

As of now the next round of negotiations will be held in Washington, D.C.

Japan and U.S. meet on trade
U.S. Trade Representative Robert Lighthizer and Japanese Economic Revitalization Minister Toshimitsu Motegi met this week to discuss a mini-trade deal on agriculture and autos.

The administration would like to announce some type of trade deal with Japan this fall. U.S. agriculture is feeling the negative effects of higher tariffs compared to its major competitors who are a part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or TPP-11.

The administration would like to reach an agreement that would not require Congressional approval.

Mexico threatens tougher border inspections
Mexico is threatening to increase border inspections of U.S. agricultural products going into Mexico unless the Department of Commerce drops its proposal that would require inspections of all Mexican tomatoes coming into the United States.

Mexican Secretary of Agriculture and Rural Development Victor Villalobos in a letter to Secretary of Agriculture Sonny Perdue says if the Department of Commerce implemented its inspection plan on Mexican tomatoes, it “could detonate requests from our domestic industry to adopt similar measures that could clearly affect supply chains — not only of fruits and vegetables but also of various other agricultural products that could be subject to quality inspections, including meats and meat products, grains and oilseeds, and dairy products, among others.”

Mexico exported nearly $2 billion of tomatoes to the United States in fiscal year 2018.

Legislation to ease Chapter 12 bankruptcy limits
The House and Senate have passed legislation that will ease Chapter 12 bankruptcy limits for farmers. The legislation would increase the debt cap to $10 million. Currently to qualify for bankruptcy, farmer’s total debt must be less than $4.15 million. This amount was established in the 1980s.

The legislation was sponsored by Congressmen Collin Peterson (D-MN), chairman of the House Agriculture Committee, Dusty Johnson (R-SD), Antonio Delgado (D-NY), Cindy Axne (D-IA), and T.J. Cox (D-CA). Sen. Chuck Grassley (R-IA) sponsored the Senate bill.

Conaway retiring
House Agriculture Committee Ranking Member Mike Conaway (R-TX) announced he will not seek re-election to Congress next year. Conaway served as chairman of the House Agriculture Committee from 2015-18.

As chairman, he was instrumental in the passage of the 2018 farm bill.

With the retirements of Sen. Pat Roberts (R-KS) and Conaway, there will be new Republican leadership on both the Senate and House Agriculture Committees.

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.

About the Author(s)

P. Scott Shearer

Vice President, Bockorny Group, Inc.

Scott Shearer is vice president of the Bockorny Group Inc., a leading bipartisan government affairs consulting firm in Washington, D.C. With more than 30 years experience in government and corporate relations in state and national arenas, he is recognized as a leader in agricultural trade issues, having served as co-chairman of the Agricultural Coalition for U.S.-China Trade and co-chairman of the Agricultural Coalition for Trade Promotion Authority. Scott was instrumental in the passage of China Permanent Normal Trade Relations and TPA. He is past chairman of the USDA-USTR Agricultural Technical Advisory Committee for Trade in Animals and Animal Products and was a member of the USAID Food Security Advisory Committee. Prior to joining the Bockorny Group, Scott served as director of national relations for Farmland Industries Inc., as well as USDA’s Deputy Assistant Secretary for Congressional Affairs (1993-96), serving as liaison for the Secretary of Agriculture and the USDA to Congress.

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