USMCA Passage Push Intensifies As China Talks Evolve

Aug 30, 2019  | 5 min  | Ep4502

As of Sunday, if there is no resolution or delay, the U.S. will impose additional tariffs on a partial list of Chinese goods. By December, the duties could top $550 billion. The increase is expected to be countered by China with higher tariffs on U.S. imports.

In what could be considered a campaign to bolster spirits among farmers suffering trade war fatigue and the sting of small refinery waivers, a bipartisan crew came calling on the Midwest.


The push for USMCA passage came to an Iowa dairy production facility this week. Former USDA Secretary and current U.S. Dairy Export Council CEO Tom Vilsack, along with Iowa Senator Charles Grassley, toured the Anderson Erickson production facility in the capitol city of Des Moines. AE does not export their products, but says trade does helps the entire industry.

The message centered on jobs that could be created if the United States Mexico Canada deal is ratified by all three countries.

Tom Vilsack, CEO, U.S. Dairy Export Council: “Not only does it preserve and protect our number one market Mexico, which is incredibly important as being a tariff free market, but it also creates an opportunity for us to protect certain cheese names.”

The dairy industry has struggled in recent times and Vilsack says more than 2,000 dairy producers have gone out of business over the last two years reducing the number of operations to 39,000.

Sen. Charles Grassley, R - Iowa: “It's an opportunity to get more poultry products, particularly into Canada. And there's an opportunity to get higher quality wheat into Canada than we have under the NAFTA agreement. But also, NAFTA, needed to be modernized.” CUT But all together, this is important for agriculture, for manufacturing, and for the future and the predictability of it.”

Senator Grassley is optimistic the U.S. Congress will ratify USMCA by the end of 2019. House Democrats have concerns over labor, environment and overall enforcement of the entire pact.

Trade was the president’s mind when he made several appearances in front of reporters at the G7 conference.

President Donald Trump: We’re taking these horrible, one-sided, foolish, very dumb, stupid, if you’d like to use that word because it’s so descriptive. We’re taking these trade deals that are so bad and we’re making good, solid deals out of them.”

U.S. producers did get some positive trade news from the G-7 conference involving Japan.

President Donald Trump: “It's a very big transaction. And we've agreed in principle, it's billions and billions of dollars. Tremendous for the farmers. And one of the things that Prime Minister Abe is also great to is we have excess corn in various parts of our country, with our farmers, because China did not do what they said they were going to do.”

President Trump said Japan had agreed to purchase U.S. produced commodities like pork, dairy and ethanol to the world’s 3rd largest economy by GDP.

Robert Lighthizer, U.S. Trade Representative: “It will lead to substantial reductions in tariffs and non-tariff barriers across the board. And I'll just give you one example. Japan is by far our biggest beef market. We sell over $2 billion worth of beef to Japan and this will allow us to do so with lower tariffs and to compete more effectively with people across the board particularly the TPP and the countries and in Europe.”

And the president also indicated he’d spoken with China following last week’s escalation of tariffs between the two countries.

President Donald Trump: “China called last night, our top trade people and said, let's get back to the table. So we'll be getting back to the table. And I think they want to do something they've been hurt very badly. But they understand this is the right thing to do.”

Chinese officials denied making calls to the U.S. shortly after President Trump made his statement.

Many of the farmers caught in the crossfire of the trade war are preparing for the looming harvest of the commodities involved.

Iowa Corn Growers Association board member Mark Mueller was at the trade group’s meeting this week calling for the Trump Administration to uphold the integrity of the Renewable Fuel Standard.

The biofuel’s future isn’t the only elephant in the room impacting producers.

Mark Mueller, District Director, Iowa Corn: “Our president administration has done a lot of harm to agriculture, like the small refinery exemptions, corn demand is being decimated. With the granting of the small refinery exemptions, or trade deals. I I'm afraid that this administration is picking trading fights, starting trade wars, but doesn't have an endgame in mind doesn't have a plan on how to win these fights.”

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