Advances for US Agricultural Exports in Trade War Jeopardy - Global Trade Magazine
  April 3rd, 2018 | Written by

Advances for US Agricultural Exports in Trade War Jeopardy

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  • Ironic timing for release of USTR report.
  • A trade war with China could hit US agricultural producers particularly hard.
  • The USTR’s National Trade Estimate shined a spotlight on its accomplishments in agriculture.
  • US agriculture has posted an annual trade surplus for over 50 years.

The timing was ironic. Just as a trade war with China is heating up, a conflict that could hit United States agricultural producers particularly hard, the US Trade Representative released its National Trade Estimate report and shined a spotlight on its accomplishments in the agricultural area.

China just announced new tariffs on 128 categories of US exports, focusing on agricultural products like pork and fruit form the US heartland. The tariffs came in retaliation for the President Donald Trump’s tariffs on steel and aluminum imports. Critics fear that the Chinese tariffs could devastate the US pork and soybean industries. China represents the largest US export market for soybeans—buying two-thirds of al exports—and the third largest market for US pork.

“US agriculture has posted an annual trade surplus for well over 50 years,” noted the USTR report. The question is, How much longer will that last is a global trade war ensues?

Among the accomplishments touted by the administration, the US and China reached agreement to reopen China’s market to US exports of beef in June 2017.  China imported $3 billion in 2017, $30 million from the US.

During the summer of 2017, China approved four of eight pending genetically engineered corn and  soybean products, which resulted from a May 2017 agreement between the US and China under the 100-Day Action Plan of the U.S.-China Comprehensive Economic Dialogue. China had previously delayed  approval of genetically engineered agricultural products. 2017 sales of US corn to China exceeded 800,000 tons, according to the USTR, compared to 185,000 tons in 2016.

US processed foods to China also gained access in 2017, as the Chinese government agreed to delay implementation of a requirement that all foods, including low-risk processed foods, enter China with an export certificate.

All of this may be in jeopardy if the trade war with China escalates, as is expected. The USTR is expected to release a list this week of Chinese high-tech products subject to new tariffs announced late in March. Time will tell what the Chinese reaction will be to that development.

Agricultural exports support more than one million American jobs, 70 percent of those jobs in sectors like processing and manufacturing. In 2017, US agricultural exports reached $138.4 billion and created a $177.2 billion in additional economic activity, for a total economic impact of $315.6 billion.

Trump has said that trade wars are good and easy to win. We’ll see what American agricultural producers and workers have to say after it all plays out.


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