It has been over a year since the opening salvos were launched in the trade war with China. In this time, we have seen agriculture producers take it square on the chin. The uncertainty in trade was one of the main catalysts in the decline of market values in commodities.
On Friday, we received word that a partial deal had been reached. According to the Trump Administration, this deal will immediately relieve $4.3 billion in tariff relief on fruits, vegetables, meats, grains, and ethanol.
Treasury Secretary Steve Mnuchin called the two days of meetings productive and was hopeful as the President met with Vice Premier Liu He.
After the meeting, President Trump announced the partial agreement. He said farmers have been, ?taken care of? in this deal. The deal calls for increased purchases of agriculture products by China.
This deal stops Tuesday?s planned increase in tariffs by the United States. It also includes some measures on intellectual property protection, currency, and financial services. It will take a few weeks to get everything down on to paper. Chinese President Xi Jingping must give the final approval to the deal on China?s behalf. The goal is for Presidents Trump and Xi to meet and finish this phase, next month, at the APEC summit in Chile.
Reactions to the announcement were optimistic, excited, but tempered with caution as we have seemingly been down this road before. However, this is some of the strongest news we have seen out of the one and a half years of negotiations.
Iowa Senator Chuck Grassley says:
?Any time progress is made, that?s good news. Farmers in Iowa know far too well that the trade war has caused real financial pain in the heartland. But we need to know more about this deal and follow-through from China will be key. I welcome the news that progress on some areas has led to a delay in tariff hikes that would impact U.S. consumers, and that President Trump plans to meet President Xi at the APEC Summit in Chile next month. A final deal must address the full scope of structural issues identified in USTR?s Section 301 report and include strong enforcement mechanisms. After so much has been sacrificed, Americans will settle for nothing less than a full, enforceable and fair deal with China. I look forward to learning more details in the coming days.?
Senator Joni Ernst was also happy with the news:
?I?m glad the administration is making positive progress on a trade deal with China. No new tariffs on goods plus additional purchases of agricultural products, like Iowa soybeans and pork, is a good sign. I look forward to learning more details about this phase of the deal. I’ll continue fighting on behalf of Iowans to ensure we’re getting a good, fair deal for folks in our state and across the country.?
Iowa Governor Kim Reynolds was pleased but also repeated her call for Congress to push USMCA through now, while we have momentum.
?Today?s announcement from President Trump is very encouraging news for our farmers, manufacturers, and the economy as a whole. With China’s commitment to purchase additional ag products, and the promise to ease tariffs, this ?phase 1? agreement would represent a major step forward. To build on this positive momentum, Congress should ratify the USMCA trade agreement to bring greater stability to our ag economy, our farmers, and small businesses.?
National Farmers Union President Roger Johnson says is glad to see the progress, but poses a few questions about the details.
?While we are glad to see a d?tente in this seemingly endless trade war, the tangible benefits to American family farmers and ranchers are unclear.
?There are many questions that still need to be answered: What will these agreed to policy reforms look like? How will they be enforced? And over what time frame will the $50 billion of agricultural purchases?an amount that is double our peak annual farm exports to China?take place?
?Regardless of the answers to these questions, this deal should not be the end of our efforts to address China?s transgressions. Their unfair and manipulative trade practices are clearly still a problem that needs to be fixed through substantive and meaningful reforms. Moving forward, the administration should work with our friends and allies to determine what those reforms should look like.?
