Tag Archives: China

U.S. Senator Ben Sasse, an outspoken trade advocate and a China hawk, issued the following statement regarding the Trump Administration’s deal to lift steel and aluminum tariffs on Canada and Mexico.

“China is our adversary; Canada and Mexico are our friends. The President is right to increase pressure on China for their espionage, their theft of intellectual property, and their hostility toward the rule of law. The President is also right to be de-escalating tension with our North American allies. Today’s news that the Administration is dropping steel tariffs on Canada and Mexico is great for America, great for our allies, and certainly great for Nebraska’s agriculture industry.”

WASHINGTON, D.C., May 10, 2019 – The Trump administration today indicated it is planning a trade relief package in response to the U.S. trade dispute with China. The following statement may be attributed to David Herring, a pork producer from Lillington, North Carolina and president of the National Pork Producers Council:

“U.S. pork has suffered from a disproportionate share of retaliation due to trade disputes with Mexico and China. This retaliation turned last year — which analysts had forecast to be profitable — into a very unprofitable time for U.S. pork producers. The financial pain continues; the 20% punitive tariff on pork exported to Mexico alone amounts to a whopping $12 loss per animal.

“While there is no substitute for resolving these trade disputes and getting back to normal trade, NPPC welcomes the offer of assistance from President Trump. We stand ready to work with the USDA to facilitate U.S. pork exports as food aid to a number of nations. This assistance should not cannibalize commercial trade. Rather, it should help people in need who otherwise would not have access to this high-quality U.S. protein.

“Pork producers have been innocent bystanders in these trade disputes. Unlike most of the population, they have suffered severe economic dislocations as a result of trade disputes.  It is fair and right that the U.S. government purchase significant quantities of pork over the next 18 months to ship as food aid to help ease the financial burden placed on producers.”

A new report says a nearly $200 million decline in Nebraska’s agricultural exports in 2017 was driven by President Donald Trump’s threats to impose tariffs on U.S. trading partners.

The Nebraska Farm Bureau report attributes the drop to decreases in soybean and corn exports, while beef and pork exports both increased in 2017.

The bureau’s senior economist, Jay Rempe, says Trump’s talks of tariffs in January 2017 caused a decline in soybean and other commodity prices. Rempe points out that China’s retaliatory tariffs didn’t occur until May 2018.

The findings come as Trump imposed his latest tariff hike on Chinese goods Friday. Beijing vowed retaliatory measures.

Rempe says Nebraska’s agricultural community will continue to face pressure unless the administration resolves its trade disputes with China, Mexico and other countries.

Washington, D.C. (May 10, 2019) –Today, the U.S. Trade Representative moved forward with increasing the tariff rate from 10 to 25 percent on $200 billion worth of Chinese goods. Farmers across the country are extremely concerned by the actions taken today by President Trump and his Administration. The National Association of Wheat Growers, the American Soybean Association, and the National Corn Growers Association were expecting a deal by March 1 before farmers went back into the fields but today saw an escalation of the trade war instead. The three commodities represent around 171 million of acres of farmland in the United States.

“U.S. wheat growers are facing tough times right now, and these additional tariffs will continue to put a strain on our export markets and threaten many decades worth of market development,” stated NAWG President and Texas wheat farmer Ben Scholz. “Further, members from both sides of the aisle and Chambers have reservations about the Section 232 tariffs in the U.S.-Mexico-Canada Agreement. Today’s announcement adds on another political barrier, which may hinder Congressional consideration of the Agreement.”

“We have heard and believed the President when he says he supports farmers, but we’d like the President to hear us and believe what we are saying about the real-life consequences to our farms and families as this trade war drags on,” said Davie Stephens, soy grower from Clinton, Ky., and ASA President. “Adding to current problems, it took us more than 40 years to develop the China soy market. For most of us in farming, that is two thirds of our lives. If we don’t get this trade deal sorted out and the tariffs rescinded soon, those of us who worked to build this market likely won’t see it recover in our lifetime.”

“Corn farmers are watching commodity prices decline amid ongoing tariff threats, even while many can’t get to spring planting because of wet weather. Holding China accountable for objectionable behavior is an admirable goal, but the ripple effects are causing harm to farmers and rural communities. Farmers have been patient and willing to let negotiations play out, but with each passing day, patience is wearing thin. Agriculture needs certainty, not more tariffs,” said NCGA President Lynn Chrisp.

Growers have been reeling for almost a year now after the President first imposed a 25 percent duty on $50 billion worth of Chinese goods in July 2018, and later, a 10 percent duty on an additional $200 billion worth of Chinese products, which resulted in the retaliatory tariffs on U.S. goods. These are having a compounding impact not only on agriculture but all industries across the United States.

Canada has used a major World Trade Organization gathering to demand China deliver evidence that Canadian canola is contaminated.

Stephen de Boer, the Canadian ambassador to the world’s leading trade body in Geneva, told the WTO’s general council on Tuesday that Canada wants to meet in China in good faith to hear its science-based concerns that recent Canadian canola shipments were, in fact, tainted.

China banned shipments from two Canadian canola companies last month. This week, the government announced China had similarly banned pork from two Canadian companies.

De Boer’s intervention at one of the WTO’s most senior decision-making bodies is an attempt to push China, which has stonewalled requests for Canadian experts to travel to the People’s Republic to examine Chinese evidence on the canola.

The government says two separate inspections by the Canadian Food Inspection Agency have turned up nothing, while several cabinet ministers have said China’s complaint about the quality of the canola shipments is not science-based.

China’s rejection of Canadian food products is part of the escalating tensions following the RCMP’s December arrest in Vancouver of Huawei Technologies executive Meng Wanzhou on a U.S. warrant alleging fraud.

Meng’s arrest infuriated China. Nine days later, China imprisoned two Canadians — ex-diplomat Michael Kovrig and entrepreneur Michael Spavor — and accused them of violating China’s national security. Both are still in custody.

While de Boer’s statement is not the formal complaint that Conservative Leader Andrew Scheer has urged the government to launch, it represents the first formal opportunity to draw attention to the issue in front of a major meeting of the WTO, said a senior Canadian government official, who was not authorized to speak on the record because of the sensitivity of the situation.

China places great importance on being a member in good standing of the WTO, the world’s trade referee, especially as it tries to displace the United States as a global trade leader.

De Boer told the WTO council that Canada wants to be a good trading partner and if another country identifies a problem with a Canadian export, then it wants to find a solution.

Canada has been working hard to resolve this issue with China using every available means on the ground in China and in Canada, said de Boer.

“But to do so we need to fully understand the problem and that’s why it’s important for them to show us the evidence,” said the senior Canadian government official. “Open and predictable rules-based trade is the cornerstone of international commerce. These are tough and difficult moments but it’s frank and open dialogue while standing up for Canadian values and interests that will resolve them.”

While Canada was pressing its case at the WTO, a Nova Scotia cabinet minister said the federal government would welcome American influence to resolve the ongoing dispute with China.

“I would say that it would be helpful, for sure,” Rural Economic Development Minister Bernadette Jordan said in an interview. “It’s different times now in the world than we’ve faced even four years ago. We see challenges all around the world. And we will continue, as a government, to stand up for our Canadian products.”

The halting of canola and pork imports has also raised the possibility that China could expand what is widely seen as economic retaliation into other areas.

Conservative MP Randy Hoback recently told the House of Commons agriculture committee he’s concerned China might decide to single out Canadian maple syrup or seafood.

Jordan said her constituency is the largest lobster-producing riding in the country, and hardly a day goes by without her talking to a fisher.

In 2017, Canada exported 10 million kilograms of live lobster to China.

Canada’s efforts to diversify its markets for seafood continue apace with the ratification of free-trade deals with the European Union and the 10 Pacific Rim countries in the Comprehensive and Progressive Trans-Pacific Partnership, she said.

“Yes, China accounts for a significant portion of our lobster sales — our seafood, it’s not just lobsters. But I think with the ability for us to open up Europe, our ability to open up other Asian markets, there is that potential to make sure that those challenges are mitigated.”

Jordan stressed there has been “absolutely no indication” of any movement by China to take trade action against Canadian seafood.

While she offered few details of what contingency plans the government may have if China does hit the seafood sector, Jordan suggested the government would come to its aid if necessary.

“We’ve worked with the canola farmers specifically on a package for them. I’m sure that when the time comes, if there’s a need, we will be there for our fishers as well.”

Last week, the government helped canola farmers by changing a special agricultural program that advances money against later crop sales. The change raises loan limits to $1 million from $400,000. The interest-free portion of that program is also rising to $500,000 from $100,000.

Agriculture Minister Marie-Claude Bibeau told The Canadian Press the government wants to ensure producers “have the support they need” and officials are “dealing with issues that arise on a case-by-case basis.”

Trade officials from China are in Washington, DC this week as the Trump administration places further pressure on China to reach an agreement with the United States.

Trump will increase tariffs on China Friday, saying talks between the two nations are going too slowly. On Twitter, Trump states he will increase tariffs on $200 billion of goods from 10 to 25 percent. Trade organization Tariffs Hurt the Heartland says the move would cost nearly one million American jobs, and “increase the likelihood of retaliation on American farmers.” China and the U.S. meet this week in what was expected to be the final round of formal talks.

Trump is expected to host his Chinese counterpart Xi Jinping in June, with the expectation the two would sign an agreement. A spokesperson for China’s Foreign Ministry said Monday the negotiations held so far between the two sides have achieved positive progress, adding, China hopes the U.S. will work to “meet each other halfway and strive for a mutually beneficial agreement on the basis of mutual respect.”

Optimism is growing that the U.S. and China could wrap up a trade agreement this month. Trade officials from the U.S. and China concluded talks in Beijing Wednesday with another critical round scheduled for next week in the United States.

The Trump administration has appeared to be ready to walk away if an agreement isn’t reached soon. However, Treasury Secretary Steven Mnuchin said on Twitter that he and Trade Representative Robert Lighthizer concluded “productive meetings” this week. The South China Morning Post reports that the U.S. has dropped the demand that China halts alleged instances of commercial cyber theft, to bring an end to the long-running tariff dispute.

A deal at this point between the U.S. and China is expected in Mid-May, with a possible signing of the agreement planned for June. However, an agreement doesn’t mean an end to tariffs. The U.S. is planning on keeping some tariffs on China, and China will likely keep retaliatory tariffs on U.S. agricultural products, according to a Chinese trade expert.

Chinese President Xi Jinping promised Friday to set high standards for Beijing’s sweeping infrastructure-building initiative as fellow leaders praised the effort despite worries it leaves some developing countries with too much debt.

Xi avoided mentioning debt in a speech at a Belt and Road forum celebrating his signature foreign initiative. But he promised changes in response to complaints about costs and possible corruption and environmental damage.

Beijing wants “open, green and clean cooperation” with “zero tolerance for corruption,” Xi said.

Developing countries have welcomed the initiative, launched in 2013, to expand trade by building roads, ports and other facilities from Asia through Africa and the Middle East to Europe. But some governments are struggling to repay Chinese loans, fueling complaints poor countries are being pushed into a “debt trap.”

The United States, Japan, India and Russia also chafe at the expansion of Beijing’s influence through building trade and political networks centered on China.

Despite that, Russian President Vladimir Putin on Friday praised the initiative, saying it dovetails with the goals of a Russian-promoted market with four of its neighbors, the Eurasian Economic Union.

Malaysian Prime Minister Mahathir Mohamad, who had suspended plans for a Chinese-built railway and other projects due to their cost, said he was “fully in support.”

Prime Minister Imran Khan of Pakistan, one of China’s closest allies, said Belt and Road has produced “substantial progress” in increasing power supplies and other areas.

The U.N.’s secretary-general, Antonio Guterres, said Belt and Road projects could help turn the balance in mitigating climate change.

Xi’s government is trying to revive the initiative’s momentum after the number of new projects plunged last year. That came after Chinese officials said state-owned banks would step up scrutiny of borrowers and some governments complained projects do too little for their economies and might give Beijing too much political influence.

Other countries including Thailand and Nepal have canceled or scaled back projects, while Ethiopia and others have renegotiated debt repayment.

Xi promised changes to forestall corruption and environmental damage. He tried to allay worries Beijing reaps most of the economic benefits and is gaining political influence.

Belt and Road is “not an exclusive club” and promotes “common development and prosperity,” Xi said. He said Belt and Road will embrace international standards for project development, purchasing and operations.

China’s Ministry of Finance issued “debt sustainability” guidelines Thursday for assessing debt risks to borrowers. The ministry said they are based on standards of the International Monetary Fund and other international institutions.

The guidelines are intended to “prevent and solve debt problems,” said Finance Minister Liu Kun. They will classify countries as high, middle and low risk based on productivity, economic growth and other factors.

The standard “may help reduce the financial stability risks” faced by some borrowers, but that “will depend on how widely it is applied,” said Moody’s Investors Service in a statement.

Other leaders attending the forum included Aung San Suu Kyi, state councilor for Myanmar, Ethiopian Prime Minister Abiy Ahmed and leaders or envoys from Germany, Italy and Greece.

Xi said Beijing wants to encourage cooperation on health, water resources, agriculture and technology. He promised scholarships for students from Belt and Road countries.

Chinese lenders have provided $440 billion in financing, the country’s central bank governor, Yi Gang, said Thursday without giving details on repayments or risks of defaults.

In addition, some 500 billion yuan ($75 billion) has been raised in Chinese bond markets, according to Yi.

The United States, Japan and other wealthy countries also finance construction in a region the Asia Development Bank says needs $26 trillion of investment through 2030 to keep economic growth strong.

In March, Italy became the first member of the Group of Seven major economies to sign an agreement to support Belt and Road.

Belt and Road countries also include many of the poorest and most indebted in Africa and Asia.

About one-quarter of the 115 governments that have signed agreements to support the initiative have foreign debt equal to at least 75% of their annual economic output, according to Moody’s. Mongolia is the most extreme at 240%. Egypt, Indonesia and Pakistan all are above 50%.

None is in immediate danger of default, but Belt and Road economies tend to have higher debt than average, weaker financial flows and more vulnerability to economic shocks, said Lillian Li, a Moody’s vice president.

Borrowing “more external funds will be more dangerous to themselves as well as to the lending countries,” Li said in an interview.

There’s a limit to how much Xi’s government might change the initiative because Beijing still wants to increase its influence and generate work for Chinese industries, Tom Rafferty of the Economist Intelligence Unit said in a report ahead of Friday’s forum.

One element to watch will be whether Beijing tries to enhance the appeal of Belt and Road by making it more like the World Bank or other multinational organizations, he said.

“This has the potential to generate further tensions with the U.S.,” Rafferty said.

Leaders of a major Iowa equipment manufacturer and Iowa farmers reiterated their calls Wednesday for President Donald Trump to remove tariffs against trading partners that have driven up the prices of steel and aluminum as well as retaliatory tariffs that are hurting farm exports.

Sen. Joni Ernst, R-Ia., told business leaders and farmers at a roundtable discussion that she needed to hear their experiences so she could get the message to Washington, D.C. that the U.S.-Mexico-Canada Agreement (USMCA) must be ratified and tariffs against Canada and Mexico must be lifted.

Roughly one-in-five jobs in Iowa is tied to trade, largely in agriculture. Wednesday’s event at Kinze Manufacturing in eastern Iowa was organized by the group Tariffs Hurt the Heartland and the Association of Equipment Manufacturers (AEM). Wednesday’s event was the 15th town hall around the Midwest as groups seek to rally support to drop tariffs.

Dennis Slater, president of AEM, said tariffs equate to a tax and the tax is hitting U.S. businesses and consumers. “China is not paying the tax. We are paying the tax,” Slater said.

Ernst said she did not see any serious sticking points that would prevent the USMCA from ratification. Congress right now is still waiting on the Trump administration to submit the trade deal to Congress, which then starts a timeline for votes on the trade agreement. The bill would begin in the House, where Ernst said she thinks House Speaker Nancy Pelosi, D-Calif., supports the USMCA.

“The administration needs to be working with the House on how to get this through,” she said.

Beyond the USMCA, there is equal angst about talks with China and the tariffs in place there. Last summer, President Trump imposed a 25% tariff on $50 billion worth of Chinese goods then followed up with a 10% tariff on $200 billion in goods. China has imposed tariffs on more than $110 billion in U.S. goods, including 25% tariffs on a range of agricultural products, including soybeans, and even higher tariffs on U.S. pork.

Ernst said trade needs to go beyond “one-off” sales to China for products such as soybeans and pork. “We need long-term resolution and that means getting the trade deal done,” the senator said.

Richard Dix, senior director of supply chain for Kinze, said the manufacturer has seen an unprecedented increase in the price of steel, which translates into higher prices for the planters, grain carts and tilling equipment Kinze makes. Then Kinze sees sales affected because farmers are worried about their own income going forward.

“If they are insecure, they are not in the dealership,” Dix said. “If they aren’t in the dealership, then they aren’t buying our products.”

Tariffs are having costs in a variety of ways. A study released this week by the University of Chicago and the Federal Reserve showed tariffs increased the costs for washers and dryers an average of $86 per washing machine and $92 per dryer. That added up to additional costs of $1.5 billion to consumers just for those products.

Further, tariffs and higher metal prices are taking away options such as investing more money in the company or rewarding employees, Dix said. “We’re forced to make different decisions because money is being siphoned away from our company.

“Our biggest fear is this becoming the new normal,” he added.

Other business people in eastern Iowa told of companies losing business to European or Asian firms because of the steel and aluminum tariffs, or the tariffs placed on China. Jon Kinzenbaw, who founded Kinze, said he’s concerned about what could happen to Iowa land values because of persistent low farm prices and the effect that would have on farmers.

“If we don’t get this thing turned around, I predict there will be a lot of farms and other things changing hands in the very near future,” Kinzenbaw said.

Ernst said she disagrees with the way President Trump used a national-security section of an old trade law, “Section 232,” to place steel and aluminum tariffs on most trade partners, especially Canada and Mexico. Those countries retaliated and expected the tariffs to be lifted once the USMCA was negotiated. Right now, the tariffs remain in place and the Trump administration has not offered any details about lifting the Section 232 tariffs.

“If there is a deal in place, and the USMCA is essentially done, then the tariffs need to be lifted,” Ernst said.

Ernst is working on legislation that would require the Department of Defense to determine national security threats before such tariffs could be imposed in the future.

Pam Johnson, former president of the National Corn Growers Association, said there is too much uncertainty about markets as farmers go to the fields this spring to plant a crop. She pointed to a recent University of Illinois analysis highlighting the losses farmers currently face planting either corn or soybeans.

“I have never had to go into a season planting a crop with that in mind,” Johnson said.

John Heisdorffer, former president of the American Soybean Association, told Ernst that U.S. farmers spent millions of dollars developing a trade relationship with China and he fears they may never get the market back like it was just over a year ago. Heisdorffer cited problems in the Dakotas trying to find a market for beans that would have been exported.

“All of those funds seem like they have been lost because we are back where we started,” Heisdorffer said. Heisdorffer also talked about how much U.S. trade disputes have helped international competitors such as Brazil. “We more or less handed them our soybean exports because of the tariffs.”

Ernst expressed confidence in the president on trade, especially the adoption of USMCA. “I think he is going to want to see this as a significant achievement of his administration,” she said.

Saskatchewan’s premier is again asking Ottawa to increase its cash advances to canola farmers.

Scott Moe says in a letter to Prime Minister Justin Trudeau, posted on Twitter, that he’s been waiting nearly a month for a response since he first asked for help.

Saskatchewan wants the amount of money available to canola farmers through a federal advance payment program to increase to $1 million from $400,000.

The province also wants the program’s end-of-March deadline extended by one month and that no interest be charged on the maximum payment amount until the issue with China is resolved.

The province has been looking to the federal government for aid since China decided to block imports of the oilseed from Canada.

The ban on $2 billion worth of canola imports has caused trade uncertainty in the industry.

China’s move is perceived to be part of a growing rift between the two nations since Canada arrested Meng Wanzhou, daughter of the founder of telecom giant Huawei, at the behest of the United States.