Trump Stops Trade Talks With Canada, Opens U.S. Market to Argentine Beef

Fmr. President Ronald Reagan: "When someone says 'Let's impose tariffs on foreign imports' it looks like they are doing the patriotic thing by protecting American products and jobs. ” (Doug Ford - @fordnation)

This television ad, released by the premier of Ontario, resulted in President Trump saying, through a Truth Social post, that “all trade negotiations with Canada are hereby terminated.” 

Fmr. President Ronald Reagan: (radio address April 25, 1987) "...that high tariff legislation, passed back in that period, called the Smoot-Hawley Tariff, greatly deepened The Depression and prevented economic recovery."

President Trump said former President Reagan’s statements on trade were taken out of context in an effort to influence an upcoming hearing in front of the U.S. Supreme Court. 

Wednesday, Prime Minister Mark Carney of Canada, said his country will double its non-US exports as a hedge for his country’s business and industry.  

Mark Carney, Canadian Prime Minister: "But this process, this decades long process of an ever closer economic relationship with the United States is now over. And as a consequence, many of our former strengths as a country, for instance, more particularly as our economy, strengths based on close ties to America, have become our vulnerabilities. And as a result of that, the jobs of workers in our industries most affected by the U.S. tariffs, in autos, in steel and lumber, are under threat. And our businesses are holding back investments restrained by the pole of uncertainty that's hanging over all of us. Our relationship with the United States will never again be the same as it was, even though in this new world of protectionism, we have the best trade deal of any other country, and we're working to make it even better still."

The action was taken after a long week of back and forth with the U.S. cattle industry.

President Trump appeared to side with the consumer this week, vowing to help lower the price of beef for millions of Americans - but in doing so, elicited fiery responses from ranchers who have been dealing with low herd numbers and years of drought.

President Donald Trump: “The beef, the ranchers, let's say, who have done a great job, have lost their shirts for many, many years. They've really been decimated. And I helped them a lot. I put tariffs on things coming into the country, including beef. And that gave them a chance to finally have a decent industry."

For the second consecutive year, USDA data revealed the smallest cattle inventory since 1973. Cattle traders say simple supply and demand is at work - fewer animals are in feedlots and the consumer is still buying beef - and tariffs are not the main driver to higher prices. 

Cattle producers have been riding high the last few years but farmers and ranchers have struggled for much of the last decade, according to USDA data. 

After the announcement measured but pointed comments started coming in from state level cattle groups, the Ranchers Cattlemen Action Legal Fund and the NCBA. 

“The National Cattlemen’s Beef Association and its members cannot stand behind the President while he undercuts the future of family farmers and ranchers by importing Argentinian beef in an attempt to influence prices”

Tom Runyan, Oklahoma cattle producer: “if we can produce it here and you don't have all the transportation costs, that saves the packer money, saves the consumer money to get it on the shelves.”

A Truth Social message on Wednesday from the President resulted in cattle complex prices going limit-down. (show “truth”) The feeder complex bought back some of the losses Thursday, before settling lower.

Sen. Charles Grassley: “I want to make very clear that I think we should not be buying more Argentine beef. Xx , he has taken steps that he can under existing law to provide more domestically produced beef. And one would be opening up more federal land to grazing, and number two, helping establish more processing plants. So the big four meat packers that have 85% of the business have more competition.”

Midweek, USDA released a plan to help cattle producers by expanding grazing access on federal land, launching new enforcement rules for voluntary “Product of the USA” labels and encouraging schools to purchase locally raised beef.

The proposal raises the import quota on Argentine beef to 176 million pounds, about 3.5% of what the U.S. has slated for import. Critics are saying an increase from Argentina will only add 2% to the total available at the meat counter and likely only reduce the price by a few cents a pound. 

The president also said he’ll talk with ranchers about beef price concerns. 

A recent $20 billion dollar aid package to Argentina had a large number of soybean farmers saying it helped China buy more Argentine soybeans and kept the U.S. sales meter with the Middle Kingdom at zero. 

For Market to Market, I’m David Miller.

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