Tag Archives: Trade

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.

Threatened tariffs could hike U.S. tomato prices between 40 and 85 percent. Research commissioned by the Fresh Produce Association of America suggests that if the U.S. withdraws from the Tomato Suspension Agreement on May 7, and applies duties on Mexican tomatoes, consumer prices could rise up to 40 percent in the period from May to December.

During other periods, such as winter, prices for certain varieties like vine-ripened tomatoes, tomatoes on the vine and Romas could rise more than 85 percent. At the request of tomato growers from Florida, U.S. Commerce Secretary Wilbur Ross announced the U.S. would end the current suspension agreement between the two countries.

By doing so, the U.S. would resume an anti-dumping investigation that could result in steep duties on Mexican tomatoes. The Tomato Suspension Agreement is an agreement suspending the antidumping investigation on fresh tomatoes from Mexico, which stops Mexico from dumping tomato exports on the U.S. market.

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.

WASHINGTON (AP) — The White House says a U.S. delegation will travel to Beijing next week to continue trade negotiations, and a Chinese delegation will return to Washington for additional talks starting May 8.

President Donald Trump has slapped tariffs on $250 billion in Chinese imports in a dispute over Beijing’s aggressive drive to challenge U.S. technological dominance. China has retaliated by targeting $110 billion in U.S. products.

The two countries are in talks to settle their differences.

Press Secretary Sarah Sanders says U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for talks that begin April 30. Vice Premier Liu He will lead the talks for China.

Sanders says topics for next week’s discussions include protection of intellectual property, agriculture and enforcement.

Japan’s exports declined in March as shipments to China dropped more than 9%, pulling the nation’s trade surplus sharply lower.

The data released Wednesday by the Finance Ministry was more or less in line with forecasts. The report followed two days of trade talks with the U.S. in Washington aimed at redressing the chronic imbalance in Japan’s favor, which totaled $67.6 billion in 2018 according to U.S. figures.

Exports from Japan, the world’s 3rd largest economy, fell 2.4% from a year earlier to 7.2 trillion yen ($64 billion), while imports rose 1% to 6.7 trillion yen ($59 billion). The trade surplus dropped 32% from a year earlier to 528.5 billion yen ($4.7 billion), customs figures showed.

Exports to the U.S., Japan’s biggest single overseas market, rose 4.4% while imports fell, increasing the politically sensitive trade surplus by nearly 10, to 683.6 billion yen ($6.1 billion), up 9.8% from the same month a year earlier.

Japan’s exports to China fell 9.4% from a year earlier, reflecting lower demand as the economy slows amid a trade war with the U.S. over Beijing’s technology ambitions.

Darren Aw of Capital Economics said in a commentary that the deficit in March was not a significant concern and that overall, trade may have contributed to economic growth in the last quarter.

“The bigger picture, however, remains unchanged — the outlook for external demand remains weak,” he said.

U.S. Trade Representative Robert Lighthizer’s office said in a statement that he and Japan’s trade minister Toshimitsu Motegi agreed to continue talks soon.

In Tokyo, Chief Cabinet Secretary Yoshihide Suga told a regular news conference that he received a report from Washington that the two sides had started negotiations in line with an agreement last September between Trump and Prime Minister Shinzo Abe. The talks included trade in agricultural products and autos.

“I expect we will have constructive talks so that we have meaningful results that serve our national interest,” he said.

Motegi told reporters that he told Lighthizer that Japan will not compromise on imports of agricultural products, saying that the conditions agreed in past negotiations are as far as Japan could go.

Japan made significant concessions on imports of dairy and other farm products during tough negotiations on the Trans-Pacific Partnership, a Pacific Rim trade deal that President Donald Trump withdrew from shortly after taking office in 2017.

“In the area of agricultural products, conditions we have promised in past economic cooperation is as far as we can go. I have told him that that’s the line Japan cannot go beyond,” he said.

Japan’s conservative ruling party, the Liberal Democrats, have traditionally relied on strong support from rural voters and have sought to protect the country’s farm sector from foreign competition.

 

The European Union approved Monday its terms for negotiating a new trade deal with the United States, but set up a possible show-down with Washington by refusing to include agricultural products in the talks.

Making public the mandate for the EU’s executive commission to conduct negotiations on their behalf, the bloc’s member countries said that the new deal will focus exclusively on eliminating tariffs on industrial goods.

EU Trade Commissioner Cecilia Malmstrom said the commission wants to wrap the talks up within six months, and that she would contact her U.S. counterpart Robert Lighthizer later Monday to work out when formal negotiations might begin.

“We are now ready to move ahead into the next phase of EU-U.S. relations,” Malmstrom told reporters in Brussels. “If we agree to start, I think it can go quite quickly. There are sensitivities, absolutely, but we can manage this quite quickly.” The commission’s term in office expires at the end of October.

The trade talks are the result of a preliminary deal reached last July by European Commission President Jean-Claude Juncker and U.S. President Donald Trump as Brussels sought to head off a looming trans-Atlantic trade war after Trump slapped tariffs on imports of EU steel and aluminum.

The United States has long wanted more access to the EU’s protected market for farm products. But William Reinsch, a former U.S. trade official now at the Center for Strategic and International Studies, said that Trump “gave agriculture away” in his meeting with Juncker, agreeing to focus U.S.-EU talks on non-automotive industrial products.

Leaving out agriculture is likely to hobble the negotiations at the outset, Reinsch said. But he added that “there are ways out of the mess” – the two sides could agree, for instance, to tackle farm trade in a later round of talks.

Trump imposed tariffs of 25 percent on steel imports and 10 percent on imported aluminum from the EU on June 1. He said the move was to protect U.S. national security interests, but the Europeans claim it is simply protectionism and breaks global trade rules.

In response, the EU introduced “rebalancing” tariffs on about 2.8 billion euros worth ($3.2 billion) of U.S. steel, agricultural and other products.

Trump has held out the threat of slapping auto tariffs on European cars should the trade talks fail to progress. Malmstrom has previously warned that the EU would break off any trade negotiations if he does.

Asked whether U.S. Congress would accept any deal that does not involve agriculture, Malmstrom said: “This is limited, but still meaningful, win-win negotiations that we are offering and that was agreed between the two presidents.”

Before Trump came to office, the Europeans had been trying for three years to conclude a more wide-ranging Trans-Atlantic Trade and Investment Pact with the United States.

The pact was meant to lift trade barriers between the world’s biggest trading partners, spark sorely-needed economic growth and create new jobs. Malmstrom underlined that the terms of that draft agreement are obsolete and that TTIP, as it is known, is now officially “in the freezer.”

China said Thursday that trade talks with the U.S. are “moving forward” after nine rounds of consultations aimed at ending a standoff that has shaken the world economic outlook.

The latest discussions had achieved “new substantial progress,” Foreign Ministry spokesman Lu Kang said at a daily news briefing.

“We also feel that the consultation is moving forward. We hope that the two sides can continue to work together to properly address each other’s concerns on the basis of mutual respect, equality and mutual benefit,” Lu said.

Lu’s comments were echoed by those from Commerce Ministry spokesman Gao Feng, who said “new progress” had been made at the talks.

Gao said the sides were now in “close communications with all effective approaches.”

“They will spare no efforts for the negotiations and working toward the direction of implementing the important consensus reached by both leaders,” Gao said at a weekly briefing.

The three days of talks in Washington last week dealt with issues including technology transfer, intellectual property rights protection, non-tariff measures, agriculture and enforcement of agreements.

Leading the delegations are U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He. White House press secretary Sarah Sanders earlier said “significant work remains” before an agreement can be reached.

The dispute centers on the Trump administration’s allegations that China steals technology and coerces U.S. companies to hand over trade secrets — all part of Beijing’s zeal to overtake U.S. technological dominance. To pressure China, the United States has imposed tariffs on $250 billion in Chinese goods. The Chinese have counterpunched by taxing $110 billion in U.S. imports.

Forecasters at the World Bank and International Monetary Fund, among others, have downgraded their outlook for the global economy in part because the U.S.-China rift is damaging trade and causing businesses to slow investment until they know how the dispute will end.

Tensions have eased somewhat since Trump and Chinese President Xi Jinping met in Buenos Aires late last year and the administration ended up suspending its plans to raise tariffs on $200 billion of Chinese imports to buy time for negotiations.

Significant work remains in trade talks with China, according to a statement from U.S. Trade Representative Robert Lighthizer’s office. President Trump has indicated a deal could be reached in the next four weeks, but the two sides offered little details regarding last week’s meetings, according to Reuters.

Lighthizer says negotiation team members “will be in continuous contact to resolve outstanding issues.” The most recent negotiations included intellectual property, or IP, forced technology transfer, non-tariff barriers, agriculture, services, purchases and enforcement. Agriculture Secretary Sonny Perdue has previously said the negotiations could conclude with a doubling or tripling of U.S. ag exports to China.

U.S. agriculture is impatiently waiting for the results of the talks which stem from the trade war enacted last year between the U.S. and China. The talks are now expected to conclude sometime within the next few months, well beyond the original deadline set by President Trump of March first. However, Trump extended the deadline because the talks were making progress.

Canadian farmers are facing an uncertain future after China escalated its feud over canola on Tuesday.

“There is a lot of confusion amongst farmers about what is able to be exported,” said David Quist, executive director of the Western Canadian Wheat Growers. China blocked canola shipments from a second Canada-based producer on Tuesday over alleged contamination issues.

A statement on China’s General Administration of Customs website said officials detected several hazardous organisms in canola shipments from Regina-based Viterra Inc. Viterra, which is part of Glencore Agriculture, did not immediately respond to a request for comment.

Winnipeg-based Richardson International Ltd. had its export permit revoked in March due to hazardous organisms allegedly found in the company’s product.

Since then, the Canola Council of Canada said all of its members have reported that Chinese importers are unwilling to purchase their products.

The result is uncertainty at the cusp of planting season, which begins in mid- to late-April for many farmers.

Quist said farmers have a lot of questions: “Therefore, a lot of people are saying: ‘What should I be planting? What should I be putting in the ground? Is there going to be a market for my product by the end of harvest season when it’s coming off the field?”

The canola council echoed that concern.

“When China injects uncertainty, it makes growers question whether they should grow food for Chinese people, said Brian Innes, vice-president of public affairs with the council.

Canadian producers will make decisions that are best for their farm, he said.

One canola farmer, David Reid, told The Canadian Press late last week that the reports of a purchasing block by China on Canadian canola will make him think about other options.

“We don’t want to grow something we can’t sell,” he said, adding there aren’t many other crop options in the part of Alberta where his farm is located. Other options available to him tend to sell for less than canola traditionally has, he said.

Both the wheat and canola groups called on the government to send a delegation to China to address the issue.

China — a major market for Canadian canola that accounts for about 40 per cent of Canada’s exports of canola seed, oil and meal — is the sole country to raise a technical issue with the product, said Innes.

Authorities in Canada’s other export markets, including the U.S., Mexico, the European Union, India and Japan, have not raised any issues, he said.

“We’re very perplexed because we’re confident in the quality of our Canadian canola.”

But China raised a technical concern and there needs to be a technical solution, he said.

Prime Minister Justin Trudeau mentioned the possibility of sending a delegation, in response to questions from reporters during a stop in Winnipeg on Tuesday.

“We’re very much looking at the possibility of sending a high-level delegation to China,” he said.

“We know that the canola produced here in Canada is top quality, and the oversight, inspection and science that surrounds what we do here is top-notch and world-class, and that is certainly something that we are going to continue to impress upon … our Chinese interlocutors on this issue.”

Some have suggested the canola ban is connected to the Canadian government’s decision to arrest a top Chinese tech executive in December at the behest of the United States. Canadian authorities arrested Meng Wanzhou, the chief financial officer of Chinese tech giant Huawei, in Vancouver and the government has since approved for her extradition case to proceed.

“But we are taking very seriously this situation around canola as well,” said Trudeau.

WASHINGTON (AP) — President Donald Trump and House Republicans moved to build congressional support for the U.S.-Mexico-Canada trade accord on Tuesday with lawmakers selling the plan as offering big benefits for American workers. But prospects remain uncertain as Democrats are in no hurry to secure a political victory for the president.

GOP lawmakers emerged from a White House meeting knowing they likely have a narrow window to push it through both chambers of Congress, given that lawmakers tend to avoid tough trade votes during election season.

“There are a lot of big wins for American workers in this agreement,” said House Minority Whip Steve Scalise, R-La. “We’d like to see it move through Congress as fast as possible and create even more jobs with this growing economy.”

The White House described the meeting as the first in a series that Trump will have with lawmakers on both sides of the aisle “to build broad support” for the pact.

Rep. Earl Blumenauer, D-Ore., the chairman of the House subcommittee that has jurisdiction over trade, said the pact needs adjustments to be “worthy of support.”

Some Republican lawmakers also have concerns. Sen. Chuck Grassley of Iowa, the Republican chairman of the Senate Finance Committee, maintains that the president should lift steel and aluminum tariffs on products brought in from Canada and Mexico as a first step to getting the trade agreement through Congress.

Trump’s top trade negotiator, Robert Lighthizer, told lawmakers during a recent congressional hearing that if they don’t pass the trade agreement, the United States will have “no credibility at all” with future trading partners, including China.

“There is no trade program in the United States if we don’t pass USMCA. There just isn’t one,” Lighthizer said.

The White House’s legislative affairs team has talked to more than 290 members of Congress and staff over the past two months to push the deal. But the administration knows that making changes in the agreement to win over lawmakers could jeopardize support for the pact from Canada and Mexico.

Sen. Joni Ernst, R-Iowa, told reporters recently that many in her state’s agricultural community are “still with the president, but if we don’t get the trade deals done, they could turn quickly.”

She said, “We need to start wrapping this baby up.”

The trade deal is designed to supplant the North American Free Trade Agreement , which took effect in 1994 and gradually eliminated tariffs on goods produced and traded within North America.

U.S. trade with its NAFTA partners has more than tripled since the agreement took effect, and more rapidly than trade with the rest of the world.

But Trump has called NAFTA a disaster for the United States. The new pact his administration negotiated is meant to increase manufacturing in the United States. Trump is warning that if lawmakers don’t approve the pact, the U.S. may revert to what he has described as “pre-NAFTA.”

Blumenauer is looking to make changes to the agreement in four areas: enhancing environmental and labor protections, ensuring enforcement of the agreement, and taking on protections for pharmaceutical companies that he believes drive up drug costs for consumers.

“I don’t think anyone wants to blow it up, but there is interest in strengthening it,” Blumenauer said.

Rep. Vern Buchanan of Florida, the ranking Republican on the trade subcommittee, said he believes the vast majority of Republicans will end up voting for the agreement. He’s tried to assure Democratic colleagues that Republicans were “open-minded to try and get some things done” to address their concerns.

Still, Republicans conceded that Democrats are in charge of the calendar.

“Ambassador Lighthizer has said legislation will be sent to the Hill when Speaker Pelosi gives the green light,” said Rep. Kevin Brady, the ranking Republican on the House Ways and Means Committee.

Brady said Republicans would work with Democrats to address “any fine-turning” they’d like to see, adding “we think it’s crucial … that we come together and pass this new agreement and get it to the president’s desk this summer.”

Canadian officials have been lobbying the U.S. to end Trump’s steel and aluminum tariffs and have suggested that approval by Canada’s Parliament could be conditioned upon them being lifted. David MacNaughton, Ottawa’s ambassador to Washington, has said it will be a tough sell to pass if the tariffs are still in place.

Dan Ujczo, a trade lawyer and Canada-U.S. specialist in Columbus, Ohio, said the trade deal could pass “relatively quickly” once the tariffs are removed.

But Scalise described the tariffs as helping to create more leverage to get a deal done.

In Mexico, the administration of then-President Enrique Pena Nieto spearheaded Mexico’s negotiations, but representatives of current President Andres Manuel Lopez Obrador were deeply involved in the talks to ensure an agreement that both the outgoing and incoming administrations could live with.

Allies of Lopez Obrador, who took office Dec. 1, enjoy a large majority in the Mexican Senate, so passage of the agreement would seemingly go smoothly.

Kenneth Smith Ramos, who was chief negotiator for Pena Nieto’s government and now works as an international trade consultant at Mexico City-based AGON, said Mexican enthusiasm for the deal could dim though if there are significant new demands on labor, pharmaceuticals, the environment or other issues.

“We made some important concessions,” he said, adding that if “the U.S. still wants more, then that starts to unbalance the agreement and there may be a growing opposition in Mexico.”