Agricultural groups were applauding the signing of the U.S.-China phase one trade deal on Wednesday morning, but many voiced concerns over whether China will remove or reduce punitive tariffs and non-tariff barriers and fulfill its commitment to purchase large quantities of U.S. agricultural goods.
Under the agreement, which goes into effect in 30 days, China pledges to buy $12.5 billion in agricultural goods this year and $19.5 billion in 2021. Many other details were not immediately released.
The American Farm Bureau Federation said the signing is an important step in giving America’s farmers and ranchers the ability to get back to business in the global market.
“China was once the largest market for U.S. agricultural products but has dropped to fifth largest since retaliatory tariffs were introduced,” said Zippy Duvall, the Farm Bureau’s president.
“This agreement will help turn around two years of declining agricultural exports. The potential of tens of billions more in exports is welcome news for farmers who are eager to compete on a more level playing field,” he said.
The National Farmers Union is cautiously optimistic about the agreement and is pushing for stronger and more enforceable provisions in the second phase.
“After so many months of uncertainty and escalating tensions, it is a good sign that our two countries appear to have found common ground,” said Roger Johnson, NFU president.
“But given the numerous deals that have been reached and then breached in the past two years, we are also skeptical. … This deal must deliver more than vague, unenforceable, short-term commitments,” he said.
Farmers for Free Trade said that while phase one makes incremental progress, it remains to be seen whether it will deliver meaningful relief for farmers.
“This deal does not end retaliatory tariffs on American farm exports, makes American farmers increasingly reliant on Chinese state-controlled purchases and doesn’t address the big structural changes the trade war was predicated on achieving,” said Michelle Erickson Jones, an FFT spokeswoman and fourth-generation Montana wheat farmer.
“The promises of lofty purchases are encouraging, but farmers like me will believe it when we see it,” she said.
Leaders of U.S. Wheat Associates and the National Association of Wheat Growers said they are encouraged.
U.S. wheat exports had been trending upward before abruptly ending when China implemented retaliatory tariffs in March 2018.
“The losses we demonstrated soon after China stopped importing U.S. wheat have only grown since then, so we hope the agreement signed today signals a potential turn-around,” Vince Peterson, USW president, said.
“Now it remains to be seen if China will comply fully with its (World Trade Organization) commitments and this new agreement so that trade between our two countries can flourish,” he said.
“Wheat farmers have experienced the harm of unfair trading practices at the hands of China for far too long,” said Chandler Goule, the CEO of NAWG.
The U.S. Apple Association said the signing is positive news, but tariffs — now at 60% — are still a substantial concern.
“We congratulate the administration for negotiating and concluding this important agreement and look forward with expectation that China’s retaliatory tariffs on our apples will be removed,” Jim Bair, USApple’s president, said.
Western Growers said the trade war with China has resulted in double-digit declines in U.S. exports of fruits, vegetables and tree nuts over the past two years.
“We are optimistic that with the completion of phase one and the future completion of phase two, U.S. specialty crop farmers will be able to achieve expanded access to and financial gain from this valuable Asian market,” Ryan Talley, Western Growers board chairman, said.
Tom Nassif, Western Growers president and CEO, noted resolution of specific sanitary and phytosanitary issues that will open the Chinese market to commodities such as avocados, blueberries, nectarines and potatoes.
Western Growers remain committed to securing “broader reforms to China’s (sanitary and phytosanitary) regime, which continues to stymie access for other U.S. specialty crops,” he said.
The American Soybean Association said phase one represents considerable strides with China and it is hopeful the agreement will lead to additional measures that restore open trade between the two countries.
“Yet, as an industry, we have a lingering unease regarding the tariff on U.S. beans, which was not addressed in this deal. China needs to take action and, as a goodwill gesture, offer to remove its retaliatory tax on our soybeans,” said Bill Gordon, ASA president.
National Corn Growers Association said the signing is a step in the right direction to resolving the trade dispute.
“As more specifics become available, we will closely monitor implementation to ensure that the commitments are upheld and that U.S. corn farmers resume trading with Chinese customers,” Kevin Ross, the NCGA president, said.
National Cattlemen’s Beef Association called the signing a “game-changer.”
“For many years, Chinese consumers have been denied access to high-quality U.S. beef,” Jennifer Houston, NCBA president, said.
Non-scientific trade barriers like the ban on production technologies, the extensive traceability requirements and the 30-month Bovine Spongiform Encephalopathy restriction have greatly limited the industry’s ability to tap into growing beef demand in China, she said.
“The removal of these massive trade barriers gives Chinese consumers access to the U.S. beef they desire, and it gives America’s cattlemen and cattlewomen the opportunity to provide U.S. beef to a growing consumer base that represents one-fifth of the global population and a middle-class that is greater than the entire U.S. population,” she said.
The National Pork Producers Council said U.S. pork is ideally positioned to address the unprecedented opportunity in China.
“However, if the U.S. continues to face 60% punitive tariffs (and a cumulative tariff of 68%) while our competitor nations are assessed an 8% tariff, U.S. pork sales will be suppressed as China imports more pork from other nations,” David Herring, NPPC president, said.
Dairy industry groups said the signing makes important advances but the benefits are unclear.
Given that China’s retaliatory tariffs remain a significant impediment to U.S. dairy sales, the U.S. Export Council and National Milk Producers Federation stressed that work with China is not complete until those tariffs are fully lifted.
The International Dairy Foods Association welcomed news of the signing and looks forward to further negotiations to remove all tariff and non-tariff barriers and create a level playing field for U.S. dairy products.