President Trump announced last Friday the U.S. and China had “agreed in principle” on a “phase one” trade deal. This is the first major breakthrough in the 18-month trade war.
As part of the deal China has agreed to purchase up to $40-50 billion annually of U.S. agricultural goods and address “agricultural structural issues” (biotech, etc.). U.S. agricultural exports reached $25.8 billion in 2012 and was approximately $9 billion last year. China also made commitments regarding currency and intellectual property.
In exchange, the U.S. will not increase tariffs on the $250 billion of Chinese goods that were to go into effect on Oct. 15. The agreement still needs to be finalized on paper which is expected to take three to five weeks. The goal is for the agreement to be signed by Trump and Chinese President Xi Jinping at the Asian-Pacific leaders summit in Chile, Nov. 16-17.
Some of the toughest issues such as technology transfer has been left for future negotiations. Also, President Trump needs to decide if he is going to proceed with imposing tariffs on the remaining $160 billion of Chinese goods. He announced earlier the tariffs would begin on Dec. 15.
Major trade decisions yet this year
There are a number of major trade decisions that will be made this year.
- Oct. 18: EU Airbus tariffs – The World Trade Organization has cleared the way for the U.S. to impose $7.5 billion in tariffs on EU goods as early as today. This is the result of the U.S. winning a WTO case against the EU’s subsidies to Airbus.
- Nov. 14: Section 232 tariffs – Trump will need to decide by Nov. 14 if he is going to impose Section 232 tariffs of 25% on imported autos and auto parts.
- Nov. 16-17: U.S.-China phase one trade agreement – The goal is to complete the “phase one” of the U.S.-China trade agreement to enable to President Trump and President XI to sign the agreement at the Asian Pacific Economic Summit.
- November/December: United States-Mexico-Canada Agreement vote – The United States Trade Representative and the House Democratic USMCA working group are trying to reach an agreement by the end of October so the Congress can vote on USMCA before the end of the year.
- Dec. 15: Chinese tariffs - Trump will decide whether to impose a 15% tariff on the remaining $160 billion of Chinese goods.
USDA to collect more harvested acreage data
Because of the recent snowstorm in Minnesota and North Dakota, USDA’s National Agricultural Statistics Service will be collecting additional harvested acreage information in those states to have a better assessment of the impact on corn and soybean acres. This will help the accuracy of NASS’ Nov. 8 harvested acreage report.
USMEF awards announced
The U.S. Meat Export Federation announced the recipients of its Distinguished Service Award and Michael J. Mansfield award.
The Distinguish Service Award recognizes individuals who have demonstrated outstanding leadership in the pursuit of USMEF’s export goals. Danita Rodibaugh is this year’s honoree. Rodibaugh is a former chair of USMEF, past president of the National Pork Board, and a former board member of the National Pork Producers Council.
The Mike J. Mansfield recognizes individuals whose leadership has helped expand international trade opportunities. This year’s recipients are Barry Carpenter, former president and CEO of the North American Meat Institute, and Wendy Cutler, vice president of the Asia Society Policy Institute.
These are three deserving individuals who have spent their careers promoting trade.
House Approps Chair to retire
The powerful chair of the House Appropriations Committee, Congresswoman Nita Lowey (D-NY) has announced she will not seek re-election next year. She is currently serving in her 16th term. Lowey has had tremendous influence over appropriations agreements especially during the past three years.
Twenty-three House Members have announced they are not seeking re-election – 23 Republicans and six Democrats.