Chinese customers are holding back on some orders of alfalfa from Washington’s Columbia Basin as they wait to see what happens with tariffs, a major U.S. hay exporter says.
A Florida boat builder absorbs $4 million in lost business and expects more pain. An Ohio pork producer is losing access to a vital export market and fears the damage will last years. A motorcycle shop near Cologne, Germany, wonders if it even has a future. A brawl that the United States provoked with its closest trading partners is starting to draw blood. On Friday, the European Union began imposing tariffs on $3.4 billion in American goods — from whiskey and motorcycles to peanuts and cranberries — to retaliate for President Donald Trump’s own tariffs on imported steel and aluminum. China, India and Turkey had earlier begun penalizing American products in response to the U.S. tariffs on metals.“We’re bleeding pretty bad right now,” said Jim Heimerl, a pork producer in Johnstown, Ohio.Pork producers like Heimerl are already suffering from plunging prices and reduced income since China’s move to impose a 25 percent tariff on American pork in retaliation for Trump’s tariffs on imported steel and aluminum. On July 6, the United States is set to slap tariffs on $34 billion in Chinese goods to punish Beijing for forcing American companies to hand over technology in exchange for access to China’s market and other brass-knuckled attempts to supplant U.S. technological dominance.
U.S. farmers are already hurting, thanks to Mexico’s retaliatory tariffs for U.S. import taxes on steel and aluminum, but the pain is expected to increase sharply in the weeks and months to come. U.S. exporters have become accustomed to the zero duties under the North American Free Trade Agreement, but the new tariffs are still equal to or below what Mexico charges most other major suppliers. That means the U.S. can still compete thanks to the closeness of the two countries, both geographically and in shared supply channels.“Trade is not going to stop right away,” said one U.S. industry official. “We’re going to continue to sell.” But on July 5, those tariffs will rise to a range of 20 to 25 percent, and that’s expected to do severe damage – perhaps lasting damage – to U.S. dairy farmers’ largest foreign market. “A 10-15 percent jump from zero – especially since other trading partners don’t have zero percent access – that’s not the end of the world,” another dairy industry representative said. “Certainly that’s going to bite a lot more once we’re up closer to levels that (other foreign exporters) have to pay, in the 20-25 percent range.” That threat prompted dozens of dairy companies and groups to send a letter to President Donald Trump on Tuesday, pleading for him to suspend the steel and aluminum tariffs on Mexican exporters. U.S. potato farmers are also being hurt by Mexico’s retaliatory tariffs on frozen french fries while Mexican consumers will likely not suffer at all, National Potato Council CEO John Keeling told Agri-Pulse. “They know that it hits the U.S. and they can still get all the french fries they need because they’re all going to come from Canada,” he said. “What happens in the short run is that volume shifts to Canada. In the long term, those shifts will become permanent.”
The U.S. Food and Drug Administration is reconsidering its plan to require that pure maple syrup and honey be labeled as containing added sugars. Maple syrup producers had rallied against the plan, saying the nutrition labels updates were misleading, illogical and confusing and could hurt their industries. No sugar is added to pure maple syrup or honey. However, the FDA's update would have defined maple syrup as an added sugar, both when used as a sweetener in the processing of other foods and as a stand-alone product. Stay tuned to see what the new proposal brings.
Round two of President Donald Trump's trade assault on Beijing is expected by the end of this week, when the Treasury Department rolls out new restrictions on Chinese investment in the United States and on the technologies that can be sold to China.After an internal debate, the administration appears to have settled on more aggressive restrictions favored by U.S. Trade Representative Robert Lighthizer and White House trade adviser Peter Navarro over a more conservative approach favored by Treasury Secretary Steven Mnuchin, two private-sector sources privy to the deliberations said.Like the tariffs that Trump imposed on $50 billion in Chinese imports — and those he has threatened to impose on $400 billion more if Beijing retaliates — the new investment restrictions and export controls are intended to pressure China to stop unfair trade practices that threaten the United States’ technological leadership. Trump is expected to invoke his emergency powers to protect national and economic security to put the restrictions in place.But the administration is already getting pushback from bureaucrats who think it would be a misuse of the export control system, and from businesses that fear the approach will further disadvantage U.S. firms trying to enter the Chinese market.
The U.S. House of Representatives approved a massive Republican farm bill with changes to the government food stamps program that make it unlikely to become law in this form. The Senate is considering its own farm bill with no major changes to the Supplemental Nutrition Assistance Program (SNAP) used by more than 40 million Americans, or about 12 percent of the total U.S. population. The House passed the $867 billion farm bill in a 213-to-211 vote, earning the support of some conservative Republicans who helped defeat it in May after its renewal became entangled in an unrelated debate over immigration.
President Trump plans to propose a reorganization of the federal government as early as Thursday that includes a possible merger of the Education and Labor Departments, coupled with a reshuffling of other domestic agencies to make them easier to cut or revamp, according to administration officials briefed on the proposal. Mr. Trump and his budget director, Mick Mulvaney, the architect of the plan, have sought to redefine as welfare subsistence benefit programs like the Supplemental Nutrition Assistance Program, or SNAP, and housing aid. It is part of a rebranding effort, championed by conservative think tanks and House Republicans, to link them to unpopular direct-cash assistance programs that have traditionally been called welfare.“They have been using the word welfare because it is pejorative,” said Elaine Waxman, a senior fellow in the Income and Benefits Policy Center at the Urban Institute, a nonpartisan Washington think tank. “The programs you can call welfare are actually very small in comparison to SNAP, which is an income support necessary to help families, workers and millions of kids.”At the heart of the plan is expected to be an attempt to shift SNAP, which serves more than 42 million poor and working-class Americans, to the new agency from the Agriculture Department. Conservative think tanks, including the Heritage Foundation and Koch-related entities, have long sought to de-link food aid from agriculture in hopes of cutting costs.
U.S. producers of pork, already saddled with duties enacted in an earlier round of the escalating trade dispute with China, are bracing for further pain after Beijing hit the products with additional tariffs due to come into effect next month. China implemented a 25 percent duty on most U.S. pork items on April 2, and a 15 percent tariff on a range of fruits and nuts, in response to U.S. tariffs on Chinese steel and aluminum products. Last week it included both categories in a second round of tariffs to be imposed on July 6. No other products have been listed twice. Pork now faces cumulative import duties of 71 percent, not including value added tax, according to a formula published on the website of China’s finance ministry last week. Cumulative duties on fruit amount to 50 percent. “The additional tariff will put us out of business,” said Zhong Zheng, founder of China-based Heartland Brothers, which sells U.S.-produced Berkshire pork to Chinese supermarkets and restaurants. The United States shipped $489 million worth of pork to China last year, and had the biggest share of import volumes in the first quarter of 2018, at about 117,000 tonnes, according to Chinese customs.
pecial agents from U.S. Immigration and Custom Enforcement (ICE) have arrested 146 workers at the Fresh Mark meat processing plant in Salem, Ohio, for alleged immigration violations, the agency said. ICE said it identified the employees as part of a year-long investigation into whether the company hired illegal aliens at its meat processing and packaging plants. Search warrants were served at Fresh Mark locations in Massillon and Canton, Ohio, as well as the Salem plant.
Threats of Chinese tariffs on U.S. agricultural imports shook the U.S. agricultural sector. Attention focused on the potential loss of farm income, with a surge of short articles published in the popular media. To help provide a deeper analysis on the trade policy impact, we organize this China theme issue with five articles: Zheng et al. and Taheripour and Tyner estimate the loss on multiple relevant crops using a partial equilibrium model and a general equilibrium model, respectively. Both studies focus on soybeans, while wheat, pork, and a few other commodities are also considered. Hansen et al., Countryman and Muhammad, and Liu et al. examine sorghum, wine, and cotton, respectively, and point out potential export reductions as a result of such tariffs. Although the current trade dispute continues to evolve, it is valuable for us to understand the potential negative impact and to be informed of possible consequences. It is our sincere hope that U.S. and Chinese negotiators will reach an agreement, since both countries ultimately lose with a trade war, as seen from the 1930s Smoot–Hawley Tariff.