Wheat leaders talk about next steps on trade

Wheat bound for export pours into a container ship at the Port of Portland. The Washington Grain Commission and the U.S. Wheat Associates are continuing to push the Trump administration to re-enter the Trans-Pacific Partnership trade agreement with 11 other nations, including Japan.

Agricultural groups are pleased the Trump administration is holding off on increasing tariffs on imports of Chinese goods, hoping it will cool down trade tension between the U.S. and China.

Without a resolution regarding China’s unfair trade practices, President Trump had promised to raise those tariffs from 10 to 25 percent on Jan. 1.

But he and Chinese President Xi Jinping came to an agreement this weekend at the G-20 summit in Buenos Aires, Argentina, that delays the increase 90 days and renews negotiations.

China also agreed to purchase a “not-yet-agreed upon” amount of U.S. agricultural and other products, according to a statement from the White House.

Both the delay and additional purchase are welcome news for U.S. agriculture, which has been hard hit by retaliatory tariffs by China.

Finding a resolution to the current impasse on tariffs is of tremendous importance to the U.S. dairy industry, Shawna Morris, vice president of trade policy for U.S. Dairy Export Council and National Milk Producers Federation, said.

U.S. sales of whey to China dropped by one-third compared to a year earlier just a few months after the imposition of China’s retaliatory tariffs and sales of cheese dropped by more than half, she said.

“We realize these issues are not easy ones, yet it’s critical for American agriculture that we find a way forward to resolve them,” she said.

U.S. Wheat Associates and National Association of Wheat Growers are glad to see reduced tensions in U.S.-China trade relations, the groups told Capital Press in an e-mail response.

“The apparent commitment from China to resume purchases of U.S. ag products is positive, and we look forward to hearing that ships loaded with U.S. wheat are once again departing PNW ports for China,” the groups said.

China hasn’t purchased any U.S. wheat since March. Consequently, U.S. wheat exports to China fell 46 percent in volume year over year in the 2017/18 marketing year for an estimated loss of $174 million. Year-to-date losses for the 2018/19 marketing year are estimated at $149 million, according to U.S. Wheat Associates.

If there’s any positive from this temporary truce, it’s that officials have hit the pause button on further escalation to the trade war. Andrew Jerome, communications director for National Farmers Union, said.

But “no tariffs have been eliminated, none of China’s bad trade policies have been addressed and, most importantly, the U.S. has lost our reputation as a reliable trading partner,” he said.

U.S. farmers are hopeful all parties will quickly resolve the trade war so they can regain markets that are decades in the making, Angela Hofmann, executive director of Farmers for Free Trade, said in a statement to the press.

“Any signal, even if temporary, that this trade war may de-escalate is welcome news for farmers,” she said.

“While farmers are cautiously optimistic about this development, they are also keenly aware that they are still subject to the existing painful retaliatory tariffs that have hurt their recently harvested crops and income,” she said.

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