China trade

President Donald J. Trump and Xi Jinping, president of the People’s Republic of China, June 29, 2019, at the G20 Japan Summit in Osaka, Japan. U.S. farm groups are urging Trump to follow through on phase one of the trade deal in which China promised to buy nearly $80 billion in U.S. agricultural products over two years.

Through the first three years of the Trump administration all the buzz was about negotiating better deals with various foreign trading partners.

Making good on a campaign pledge, President Trump reopened talks on the North American Free Trade Agreement with Canada and Mexico. The product of those negotiations was the USMCA.

A year ago, the U.S. and Japan reached an agreement in principle, correcting a competitive disadvantage that has hampered American farmers since the U.S. pulled out of the Trans-Pacific Partnership.

In December, the administration and Chinese officials announced “Phase One” of a deal to de-escalate a 17-month trade war between the two countries.

The U.S. agreed to suspend a new round of tariff hikes on $160 billion worth of Chinese goods that were to go into effect last weekend and to reduce tariffs on $112 billion in goods that are already in place. China agreed to buy $36.5 billion worth of agricultural goods from the U.S. a year for the next two years.

Now, many months have passed and the pandemic has hit, farmers and ranchers in the United States say that trading partners aren’t living up to the new deals.

Even before the pandemic, most commodity groups said the goal in the China deal was ambitious. Bloomberg reports that China should have bought $16.7 billion in farm goods through the first six months of the year to be on target, but has made good on only $6.5 billion in purchases. China typically buys a lot of grain at harvest time when prices are most favorable, but its purchases would have to dramatically increase to get back on pace.

Earlier this summer farm groups asked the administration to “stay the course” on terms of the Phase One agreement as it prepared to open talks with China on issues of interest to other industries.

Meanwhile, dairy farmers say that Canada isn’t living up to USMCA in terms of tariffs and they worry that Mexico won’t guarantee market access for U.S. cheeses with common names.

Every administration announces new trade deals with great fanfare. While negotiating and signing treaties are great accomplishments, they are means to the real end — delivering increased foreign purchases of U.S. goods.

The art of enforcing the deal too often falls by the wayside.

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