Tag Archives: China

WASHINGTON (AP) — President Donald Trump on Thursday accused China of “letting us down” by not promptly buying more U.S. farm products.

“They have not been buying the agricultural products from our great Farmers that they said they would,” the president said on Twitter. “Hopefully, they will start soon.”

After meeting with President Xi Jinping late last month, Trump said China had agreed to buy more U.S. agricultural products as part of a cease-fire in the two countries’ trade war. The truce suspended U.S. plans to impose tariffs on an additional $300 billion in Chinese goods — action that would have extended the taxes to everything China ships to America.

The United States and China are sparring over the Trump administration’s allegations that Beijing is using predatory tactics — including stealing sensitive technology and forcing U.S. firms to hand over trade secrets — to try to supplant American technological supremacy.

Trump has imposed 25% tariffs on $250 billion in Chinese imports. Beijing has counterpunched by taxing $110 billion in U.S. goods, specifically targeting U.S. farm products produced by many Trump supporters in the U.S. heartland.

The administration has rolled out $27 billion in aid to farmers to ease the pain.

Trump and Xi agreed to restart negotiations that had broken down in May after 11 rounds of talks. So far, the two countries’ top envoys have spoken by phone but haven’t announced plans to resume face-to-face talks.

In addition to opposing sharp-elbowed Chinese tech policies, the United States wants Beijing to buy more U.S. products and to narrow America’s trade deficit with China — a record $381 billion last year.

Last month, a former Chinese diplomat, Zhao Weiping, told reporters in New York that the United States was asking “us to purchase more than we can buy.” He added, “You have to be realistic.”

Still, Larry Kudlow, director of Trump’s National Economic Council, said Thursday that “our side expects China very soon to start purchasing American agriculture commodities, crops, goods and services.”

Poland’s foreign minister says the country would like China to open up its market further to goods from Poland.

Jacek Czaputowicz spoke Monday following talks with China’s Foreign Minister Wang Yi on intensifying political and business ties between the two nations.

Czaputowicz said the greatest challenge was balancing off the trade exchange and increasing Poland’s exports to China.

Of some $33 billion worth of Poland-China trade in 2018, Poland’s exports amounted to only $2.5 billion.

Poland is aspiring to be China’s key partner in Europe, as Beijing is developing its business ties across the world.

Czaputowicz and Wang also spoke on developing bilateral partnerships in transport, agriculture, tourism and finance.

The African Swine Fever death toll in China has risen to 1.2 million animals. An Associated Press Report said the infection has begun pushing global pork prices higher, even though a Chinese deputy ag minister said the rate of infection has “significantly slowed.” The official said Chinese authorities are “stepping up” their efforts to contain the African Swine Fever outbreak but describe the situation as “complicated and grim.”

The Chinese government is reportedly working on a vaccine, but that work has a long way to go yet.

Pork is a big part of the overall Chinese diet, with the country producing and consuming two-thirds of the world’s pigs. Major Chinese cities are short on pork because bans were imposed on shipping pigs out of infected areas since August. Importers are said to be filling the demand by bringing in pigs from abroad, pushing up prices in Asia and Europe.

The AP quoted the Chinese ag minister who said, it’s an indisputable fact that the outbreak of swine fever in China has significantly slowed. However, he also admitted that some local authorities have failed to report or contain outbreaks.

“We can’t promise that it never happens,” he admitted, “but if it does, we will punish it strictly and immediately.”

Now that President Trump and Chinese President Jinping have agreed to a temporary trade truce, Trump says China has promised to buy large amounts of ag products from U.S. farmers.

A Politico report looked into what products that shopping list might include. Soybeans are likely to be on top of the list. Soybean farmers have been hit hardest by Trump’s trade war because China was once the top export market for U.S. soybeans. Beijing bought another 544,000 metric tons last week, its largest buy since March. Pork might be another key item on the list as pork producers have also been hit hard by the trade feuds, especially with China and Mexico.

As African Swine Fever continues to ravage China’s once-giant herds, Beijing could now turn to U.S. hog farmers to fill in the country’s appetite for protein. Politico also says that ethanol exports to China could potentially grow. That would help ease some pressure on corn growers and biofuel producers, a key constituency that’s complained the administration’s trade policies are harming demand for ethanol.

The only question is that China doesn’t maintain government reserves of ethanol and the tariffs are currently prohibitive. As of right now, there isn’t a lot of space for China to buy up huge amounts of the biofuel.

Australia’s trade minister Simon Birmingham weighed in on the truce struck over the weekend between the U.S. and China. Birmingham says the Australian government will be watching “very closely” to make sure the truce doesn’t put the squeeze on Australian ag exports.

The Guardian Dot Com says presidents Donald Trump and Xi Jinping reached a “ceasefire” in a conflict that continues to threaten global economic growth. One of the things Trump mentioned first after the ceasefire was announced over the weekend was that China had agreed to buy a “tremendous amount of food and agricultural products from American farmers.”

The Australian trade minister was in Osaka, Japan, for the G-20 and said the deal between Washington and Beijing must be compliant with World Trade Organization rules, allowing Australian farmers to compete with other exporters on fair terms. Birmingham said taking a “long-term perspective,” he felt it was good news that Trump and Xi appeared to be toning down the trade hostilities between the two countries. “However, we’ll be keeping an eye on the detail and monitoring the situation closely,” he said.

The U.S. and China have agreed to forgo the next round of tariffs that President Trump threatened to impose on $300 billion in Chinese goods.

That report comes from both Politico and the South China Morning Post. It comes ahead of a meeting between Trump and Chinese President Xi Jinping this weekend at the G-20 Summit in Osaka, Japan. One source tells the South China Morning Post that Trump’s decision to temporarily halt raising tariffs on more Chinese goods was President Xi’s price for agreeing to meet with him in Japan. It’s well known that agriculture has been one of the hardest-hit economic sectors by Trump’s trade dispute with China. Other countries have responded to American tariffs on imports by trying to exert pressure on a big part of the electorate that ultimately helped Trump win the presidency.

Also on the trade front, U.S. Trade Representative Robert Lighthizer made a pre-Japan visit down Pennsylvania Avenue in Washington, D.C., this week to get some more face time with House Democrats before heading overseas for the G-20 gathering. Trump’s trade boss left Democrats feeling more optimistic about getting their concerns with the U.S.-Mexico-Canada Trade Agreement resolved

In the last 30 days, ASF has officially claimed more territory across all parts of Asia. Today, according to official statistics by the Food and Agriculture Organization, you can find ASF in Cambodia, China, Laos, Mongolia, North Korea and Vietnam—and experts predict its relentless march will continue.

Numbers Are Staggering

In Vietnam alone, officials report more than 2.5 million pigs have been culled from the national herd due to ASF. The disease has spread to nearly every province. In a country of 95 million people where pork makes up 75% of total meat consumption, this reality spells trouble.

Meanwhile in China, the picture does not look too much better despite the government’s ongoing efforts and that by large private producers. The nation’s swine herd shrank 21% on the year in April to a level not seen since the early 1990s, according to agriculture ministry data. Dutch lender Rabobank forecasts the herd will decline between 20% and 30% in 2019 from the previous year when China recorded a herd of 428 million head.

Potential Rebuilding?

According to Pan Chenjun, a senior analyst at Rabobank, Chinese farmers have yet to heed authorities’ calls to replenish their herds, as they are worried they could lose their stock again due to the disease. “In theory, it requires two to three years to have a recovery of stock, but if you look at other countries’ experiences with ASF, we can take it that for China it will take more than five years,” she said.

However, there have recently been several notable announcements of major expansions of swine herds in China. New Hope Liuhe, a Chinese integrator, has announced plans to add 1.6 million head to its herd across three provinces. Likewise, China’s second-largest pork producer, Muyuan Foods says it will continue to increase production this year, despite ASF. These two companies and others such as WH Group, are pinning expansion hopes based on the nation’s reduced supply, which they see as profitable now and into the foreseeable future.

Meanwhile, the disease’s toll on China’s swine herd continues to reach epic proportions with recent estimates pegging current and future losses related to ASF at more than 200 million pigs. Even more dire than this is the seeming inability of the country’s pig farmers and veterinarians to successfully repopulate farms and keep them from breaking with ASF again even after they have been depopulated, cleaned, disinfected and left idle for months. This has led to pork shortages and reports of some outlets having to switch to alternative proteins such as chicken or seafood.

In a report by China’s Ministry of Agriculture from earlier this year, a study of 68 Chinese outbreaks found that vehicles and workers are the most common way that ASF spreads. (See pie chart.) Feeding swill and transporting live pigs or pork with ASF contamination are also key methods of ASF transmission.

Laos Now Positive, Vietnam Losses Continue

On June 20, the agriculture ministry of the Lao People’s Democratic Republic (Laos) reported its first-ever cases of ASF to the World Organization for Animal Health (OIE). Outbreaks were confirmed among seven small herds of village pigs. All the cases were in the same district of Salavan, a province in south-central Laos that borders Vietnam to the east and Thailand to the west. The source of the infection is unknown, but nearly all regions of nearby Vietnam are ASF positive.

Authorities in Laos report that movement controls have been put in place, and disinfection is being carried out in the affected area. Intensive surveillance there and across the country is to be stepped up, and a stamping-out policy will be followed.

With Vietnam positive for ASF for about four months now and Cambodia for more than two months, production losses are mounting and causing much nervousness in adjoining Thailand. To this end, the Thai government approved $4.7 million toward strengthening the country’s defense against ASF, according to a Bloomberg report. Thailand produces over 2 million hogs each year, and exports about 40% to Cambodia, Laos and Myanmar. It doesn’t import live hogs or pork and visitors are not permitted to bring processed pork products into the country.

Meanwhile, the spread of ASF in Vietnam continues to worsen as 2 million domestic pigs have been culled. The virus has spread to 48 provinces, including Dong Nai, which supplies around 40% of the pork consumed in Ho Chi Minh City, Vietnam’s southern economic hub.

Prime Minister Justin Trudeau and U.S. President Donald Trump are to discuss continental trade and their shared challenges with China in a meeting in Washington next week.

The Prime Minister’s Office says the leaders will use next Thursday’s meeting to talk about the ratification of the new North American trade agreement and outstanding trade disputes between Canada and the United States.

The meeting will also give Trudeau and Trump an opportunity to discuss strategy ahead of the G20 leaders’ summit in Japan at the end of the month, which will give them face time with Chinese President Xi Jinping.

Trudeau and Trump will also talk about two Canadians detained in China for the last six months.

In December, China detained Michael Kovrig and Michael Spavor in apparent retaliation for the RCMP’s arrest of a Chinese high-tech executive on a U.S. extradition warrant.

Canada is caught between its two biggest trading partners on that issue, with Trudeau insisting Canada has to follow the rule of law but having no luck pressing the case with China’s leaders.

Besides the Kovrig and Spavor cases, China has obstructed shipments of Canadian agriculture products such as canola and pork, claiming that they’re ridden with pests or have labelling problems. On Thursday the government promised that Export Development Canada will put up $150 million in additional insurance backing for canola farmers looking to sell in new markets.

U.S. Vice-President Mike Pence has said Trump will press Xi to release Kovrig and Spavor and will link the plight of the two Canadians to broader trade talks between Washington and Beijing. Global Affairs Canada says Spavor received his eighth consular visit from Canadian diplomats on Thursday, one day after Kovrig’s latest visit.

While Trudeau and Trump have crossed paths at various international events in the last year, and had several telephone conversations, this will be their first substantive meeting since the U.S. president insulted the prime minister a little over a year ago after departing the G7 in Quebec.

The two leaders have continued to engage because both governments needed to wrestle a conclusion out of the often acrimonious renegotiation of the North American Free Trade Agreement, which Trump forced on Canada and Mexico.

Now, with the recent removal of U.S. tariffs on Canadian and Mexican steel and aluminum imports, there is renewed momentum to ratify the new trade pact.

Mexico’s Senate is expected to give its final legal approval to the new deal next week, but a delicate political dance continues between Ottawa and Washington over ratification. Trudeau has tabled the government’s ratification bill and it is winding its way through Parliament — slowly — ahead of next week’s adjournment of the House of Commons.

Canadian government sources have said the House could be recalled after its summer recess, in a last session before the October federal election, to deal with ratifying the new NAFTA if the U.S. Congress doesn’t deal with the matter promptly. As much as the government wants to move “in tandem” with the U.S. toward final approval of the new agreement, it doesn’t want to get too far ahead.

Some Democrats in the House of Representatives are less enthusiastic about the new deal, and some would like to deny Trump a trade victory. Some Democrats have said they want to see stronger provisions on labour and environmental standards in Mexico but that country’s lawmakers have approved a new labour-reform law that has won plaudits in Ottawa and among many other lawmakers in Washington.

Foreign Affairs Minister Chrystia Freeland concluded a two-day visit to Washington on Thursday, meeting two leading Republican and Democratic senators. A day earlier, Freeland discussed trade with U.S. trade czar Robert Lighthizer and China with Secretary of State Mike Pompeo.

Expanding U.S. export markets is vital to the success of American pork producers, but trade disputes with some of our top markets, most notably China, are hampering growth and have caused severe financial harm to U.S. hog farmers, National Pork Producers Council Vice President and Counsel of Global Government Affairs Nick Giordano said today at a Global Business Dialogue event in Washington, D.C.

“Mostly because of free trade agreements, the United States is the leading global exporter of pork. As a result, U.S. pork is an attractive candidate for trade retaliation. America’s hog farmers – and many other sectors of U.S. agriculture – have been at the tip of the trade retaliation spear for more than a year,” Giordano explained to the briefing at the National Press Club.

 

While Mexico’s 20 percent retaliatory tariff on U.S. pork was recently lifted, America’s producers still face a stifling 62 percent tariff into China. There are enormous trade opportunities with China, especially to help offset reduced domestic production due to African swine fever (ASF), a pig-only disease with no vaccine treatment that poses no human health or food safety risks, but that is almost always fatal for hogs, Giordano noted.  ASF has spread to every province in China, other parts of Asia and in Europe.

Giordano said NPPC is working with the U.S. Department of Agriculture and Customs and Border Protection to strengthen biosecurity at our borders and on our farms to prevent its spread to the United States.

“We have always known that China holds more potential than any market in the world for increased U.S. pork sales. But, today, because of African swine fever, that potential is off the charts, offering the single greatest sales opportunity in our industry’s history,” said Giordano. “China needs reliable suppliers of pork now, and likely, well into the future. The question U.S. hog farmers are asking: ‘Will we get the main course, or will we get the crumbs off the table?'”

“For most of the last year, the U.S. pork industry has the dubious distinction of being on three retaliation lists: China and Mexico related to U.S. actions under Section 232 of the Trade Expansion Act of 1962 and China in response to U.S. tariffs imposed under Section 301 of the Trade Act of 1974,” Giordano said. Last year, Mexico was the industry’s largest volume market and China was the third top market by volume, although punitive tariffs imposed by those two countries have cost U.S. pork producers $2.5 billion over the last year.

“U.S. pork production costs are among the lowest in the world with safety and quality that are second to none. But for the retaliatory duties, the United States would be in a perfect position to take advantage of this massive import surge in the world’s largest pork-consuming nation and single handedly put a huge dent in the U.S. trade imbalance with China,” Giordano said. Instead, Chinese pork buyers are reaching out to those in Europe, Canada and Brazil for supplies. “What should have been a time of enormous prosperity and growth for U.S. pork producers and their suppliers will instead fuel jobs, profits and rural development for our competitors,” he noted.

“U.S. hog farmers understand the challenges faced by this administration in recalibrating U.S. trade policy toward China. The issues are myriad and complex. Moreover, hog farmers appreciate the farmer aid packages that the administration has put forward,” Giordano continued. “However, the China pork tariff needs to be lifted.”

Giordano’s full remarks can be read here.

(THE CONVERSATION) Soybeans may not seem all that useful in a war. Nonetheless they’ve become China’s most important weapon in its ever-worsening trade conflict with the U.S.

China, the world’s biggest buyer of the crop, has reportedly stopped purchasing any American soybeans in retaliation for the Trump administration raising tariffs on US$250 billion of Chinese goods. This is very bad news for U.S. farmers.

While China’s targeting of soybeans may have come as something of a surprise to most Americans, to a professor of agricultural economics who studies international commodity markets for a living, this was not at all unexpected.

Even before the conclusion of the 2016 presidential race, trade analysts were already weighing the possibility that China might impose an embargo on U.S. soybean imports based on protectionist rhetoric from both candidates.

As a result, with the trade war in full swing, American soybean farmers are now among its biggest losers. Here are a few figures that show why.

Soybeans, by the numbers

Soybeans are a crucial part of the global food chain, particularly as a source of protein in the production of hogs and poultry.

The importance of China as a market for soybeans has been driven by an explosion in demand for meat as consumers switch from a diet dominated by rice to one where pork, poultry and beef play an important part. Chinese production of meat from those three animals surged 250% from 1986 to 2012 and is projected to increase another 30% by the end of the current decade. However, China is unable to produce enough animal feed itself, hence the need to import soybeans from the United States and Brazil.

In 2017, the U.S. accounted for $21.4 billion worth of global soybean exports, the second largest after its main competitor Brazil, which exported $25.7 billion.

Meanwhile, in 2017 China accounted for the lion’s share of global soybean imports at $39.6 billion, or two-thirds of the total.

Back in 2017, that was good news for American farmers, when U.S. exports made up about a third of Chinese purchases, or $13.9 billion. That made soybeans the United States’ second-most valuable export to China after airplanes.

But U.S. exports to China have fallen dramatically since China slapped a 25% tariff on Americans soybeans last April as part of its initial response to President Donald Trump’s trade war.

In the current farm marketing year, which began Sept. 1, U.S. farmers have exported just 5.9 million metric tons of soybeans to China, compared with an average of 29 million at the same point during the previous three years – or about 80% less.

That’s why the tariffs have tremendous potential to hurt farmers in my state of Ohio, where soybeans were the number one agricultural export in 2017 at $1.3 billion. China is the state’s largest export market.

And yet nationally, Ohio is just the seventh-largest exporter of soybeans, after Illinois, Iowa, Minnesota, Nebraska, Indiana and Missouri, all of which are suffering from the tariffs.

Not only do farmers stand to lose out by giving up market share to Brazilian farmers, but soybean prices at the port of New Orleans have fallen as well and are currently $9.35 a bushel compared with $10.82 per bushel a year ago. This has hurt incomes and created a double whammy for Midwest farms.

This is of course why the Chinese chose to place a tariff on U.S. soybeans in the first place. Farmers will hurt a lot, and soybeans are produced in states where many of them voted for Donald Trump. China’s hope, presumably, is that farmers will lobby the administration to step back from further escalation of the trade war.

That seems unlikely, given the $28 billion in aid the Trump administration is offering farmers to soften the blow and the possibility of higher tariffs on an additional $325 billion worth of Chinese imports. At this point it looks like both sides are hunkering down for a prolonged trade war.

This is an updated version of an article original published on April 5, 2018.

This article is republished from The Conversation under a Creative Commons license. Read the original article here: http://theconversation.com/how-soybeans-became-chinas-most-powerful-weapon-in-trumps-trade-war-118088.