Trump hits China with new tariffs, China retaliates

Legislative Watch: China and United States trade war heats up, Senate Ag Committee passes Farm Bill while House to vote again, Courts rule against COOL case and Accurate Labels Act introduced.

P. Scott Shearer, Vice President

June 15, 2018

4 Min Read
Trump hits China with new tariffs, China retaliates
Ihor Kashurin/Getty Images/Istock

President Trump announced he was imposing 25% tariffs on $50 billion of Chinese-made products in response to alleged intellectual property theft.  The products hit by the tariffs will be those the White House said “contain industrially significant technologies.” 

Immediately China announced it would impose trade barriers of the “same scale and the same strength.”  China will primarily hit products from farm states and the industrial Midwest.  It is expected that U.S. soybeans will be one of the first items hit with tariffs.  China also said their offer to buy up to $70 billion in additional U.S. goods, agriculture and energy, was now “invalid.”

Trump has said if China reacts with retaliatory tariffs, he would “pursue additional tariffs” on China.  These actions move the U.S. and China closer to an all-out trade war in which U.S. agriculture will be a casualty. The first set of tariffs are expected to go into effect on July 6.  

Senate Ag Committee passes Farm Bill

The Senate Agriculture Committee passed it’s 2018 Farm Bill, S.3042, the “Agriculture Improvement Act of 2018,” on a very strong bipartisan vote of 20-1.  The bill maintains much of the structure of the 2014 Farm Bill by continuing to give producers a choice between Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs and maintains crop insurance.  The bill is for five-years.

 Other provisions include:

  •  Vaccine Bank – An animal disease vaccine bank would be established.  It would not receive mandatory funding as is provided in the House bill.

  •  Payment Limits – The adjusted gross income (AGI) limit for commodity payments would be reduced to $700,000 per year from the current $900,000 per year to tighten farm program eligibility.

  • Conservation Reserve Program – The Conservation Reserve Program (CRP) would be increased to 25 million acres compared to the current 24 million acres.  The increase in acres would be paid for by capping CRP payments at 88.5 percent of the local rental rates.

  • EQIP – The funding for the Environmental Quality Incentives Program (EQIP) would increase from $1.473 billion in 2019 to $1.595 billion by 2023.  Half of the funding would be set-aside for livestock producers.

  • Livestock Dealers Trust – USDA is to conduct a study to determine the feasibility of establishing a livestock statutory trust.

  • Trade Promotion Programs – The bill provides $259.5 million of mandatory funding for USDA’s major trade promotion programs - Foreign Market Development Program (FMD), Market Access Program, Emerging Markets, and the Technical Assistance Program for Specialty Crops.

  • SNAP – The bill provides funding for pilot programs that study approaches to assist Supplemental Nutrition Assistance Program (SNAP) recipients find jobs or higher paying jobs.  It does not adopt the House approach of expanded work requirements for SNAP recipients.

  • Industrial Hemp – The bill legalizes the production of industrial hemp and makes it eligible for crop insurance.  This is a priority for Senate Majority Leader Mitch McConnell (R-KY). 

The bill will be considered by the full Senate before the July 4th Congressional recess.

House to vote again on Farm Bill

The House of Representatives plans to vote again on the House Agriculture Committee’s Farm Bill either next Thursday or Friday.  The bill failed on its first attempt when some conservative Republicans voted against the bill to protest that the House had not considered immigration legislation.  The House will consider two Republican immigration bills next week before the vote on the Farm Bill.  Again it will be a straight party-line vote on the Farm Bill.

Courts rule against COOL case

The U.S. District Court for the Eastern District of Washington dismissed a lawsuit by Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, and Cattle Producers of Washington which challenged the Food Safety and Inspection Service’s (FSIS) rule on labeling imported meat products.  The groups wanted to reinstate country of origin (COOL) requirements claiming that USDA was “unlawfully allowing imported beef to be sold to consumers” without a COOL label.

The suit asked the court to “declare unlawful and vacate UDA regulations related to country of origin labeling (COOL) requirements for beef.” 

Bill Bullard, R-CALF USA CEO,  said, “While obviously disappointing, the outcome of this case highlights the urgent need for the new Administration and new Congress to reverse the harm to U.S. cattle producers brought about by the actions of the previous Administration and Congress.”

 Accurate Labels Act

Bipartisan legislation has been introduced in the Senate and House of Representatives to provide the nation's consumers with “clear, accurate, meaningful” nutrition information and prevent the issuance of inaccurate labels that “mislead” consumers and increase prices.  The bill would require states to provide scientific backing for any label claims.

The “Accurate Labels Act” would ensure that consumers have access to accurate and easy-to-understand product information by:

Establishing science-based criteria for all additional state and local labeling requirements;
Allowing state-mandated product information to be provided through smartphone-enabled “smart labels” and on websites, where consumers can find up-to-date, relevant ingredients and warnings; and
Ensuring that covered product information is risk-based.

The bill was introduced by Senator Jerry Moran (R-KS) and Congressmen Adam Kinzinger (R-IL) and Kurt Schrader (D-OR).

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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