Last week saw a flurry of trade topic tidbits.
Talks with China and Japan got underway, plus the World Trade Organization (WTO) ruled in the U.S.’ favor on Chinese grain quotas; there was more sabre rattling between the U.S. and the European Union (EU) over trade, tariffs, and subsidies; and things are not quiet here at home.
China
On Monday, April 15, DTN’s Washington Insider reported that U.S. and Chinese trade negotiators had made headway. Treasury Secretary Steven Mnuchin was quoted as saying the issue of an enforcement pact, the biggest obstacle to a deal, was “nearly settled.”
“We’re hopeful that we’re getting close to the final round of concluding issues,” he said during a press conference during the weekend.
Also on Monday, the Chinese Ministry of Commerce announced it was reviewing its antidumping duties against imports of U.S. dried distillers’ grains. The anti-dumping tariff has been part of the varied tariff battle between the U.S. and China that dominated 2018.
On Thursday, April 18, the WTO announced its findings to a 2016 U.S. complaint against China over its tariff rate quotas (TRQs) on grain. The WTO mostly found in the U.S.’ favor, saying China’s grain TRQs “are inconsistent with the obligations” it has as a WTO member.
The complaint was initiated by the U.S. on Dec. 15, 2016, and four other countries—Australia, the EU, Canada, and Thailand—quickly joined in the complaint.
“Making sure our trading partners play by the rules is vital to providing our farmers the opportunity to export high-quality, American-grown products to the world,” said Agriculture Secretary Sonny Perdue in the U.S. Trade Representative’s (USTR’s) official response to the announcement.
“Today’s announcement is another victory for American farmers and fairness in the global trade system.”
Japan
Monday and Tuesday of last week saw U.S. and Japanese trade negotiators meet to try to hammer out a trade deal.
Official information was slim, with the Office of the USTR saying simply that USTR Robert Lighthizer met with Japan’s Economic Revitalization Minister, Toshimitsu Motegi, and they “discussed trade issues involving goods, including agriculture, as well as the need to establish high standards in the area of digital trade.”
The U.S. Cattlemen’s Association praised the talks, noting that “Japan represents key market access and potential for U.S. born and raised beef.”
DTN’s Washington Insider reported that agriculture was the U.S. focus of the talks, but added that “Japan will be unwilling to accept a one-sided deal where it cuts agricultural tariffs without getting anything in return.”
Across the pond
Monday saw the EU authorize talks to eliminate tariffs with the U.S. and talk trade, but EU Trade Minister Cecilia Malmstrom made it clear that agricultural goods were not on the table, calling it a “red line” for the EU.
This move came despite past threats on both sides to issue billions of dollars in tariffs against each other, and additional tariff threats followed. Malmstrom said the EU would “suspend negotiations unilaterally if the U.S. were to impose further trade restrictions against European products.”
The EU is covered by the Section 232 tariffs on steel and aluminum, and President Donald Trump has occasionally threatened to impose tariffs on EU-sourced cars, also under the banner of national security. DTN’s Washington Insider described the EU as “bristling over the idea that it poses a threat to the U.S.”
On the home front
Trade issues are rumbling here at home, too.
On Friday, April 12, during a presidential campaign rally, Democratic hopeful Sen. Bernie Sanders (I-VT) called on Trump to “go back to the drawing board on NAFTA [the North American Free Trade Act].” Sanders said the NAFTA replacement, the U.S.-Mexico-Canada Agreement (USMCA) would result in more jobs being sent to Mexico.
Canadian elections in June have set a sort of unofficial timeline. Whether or not Congress can pass the USMCA in that time is becoming increasingly uncertain.
DTN’s Washington Insider also noted the presence of trade-related politicking in congressional Republicans, who see potential tariffs from the EU and agreements with China as potential threats to U.S. farmers and ranchers.
Additionally, congressional Republicans are torn over the matter of presidential tariffs powers. DTN’s Washington Insider reports that Sen. Chuck Grassley (R-IA) and Sens. Rob Portman (R-OH) and Pat Toomey (R-PA) have said they are working on competing pieces of legislation that might give Congress more control over what tariffs the president can issue as a matter of national security. — WLJ
