Tag Archives: Trade

French vintners are begging for government aid. Italian farmers are scrambling for new export markets. And American shoppers are about to face supermarket sticker shock on European products.

That’s because some $7.5 billion in U.S. tariffs on European food, wine and other goods took effect Friday, in response to illegal EU subsidies to planemaker Airbus.

The U.S. is also accused of illegal subsidies — to Boeing — and EU Trade Commissioner Cecilia Malmstrom threatened Friday to impose retaliatory tariffs on U.S. products. But she held out hope that negotiations could prevent a trade war escalation that would have global fallout.

Louis Moreau feels the sting of the Trump administration’s wine tariffs personally.

A sixth-generation Chablis producer in Burgundy, he cut his teeth in California, where he lived for 10 years before taking over the family business in 1998.

Since then, he’s worked to expand his American business, traveling to the U.S. three times a year to promote his top-quality white wines. Around 8% of his exports, or roughly 17,000 bottles, go to the U.S. each year.

“Where is the logic? It’s not fair,” Moreau told The Associated Press. He said he and other Chablis producers feel they’re being held hostage to an unrelated political dispute.

“We have good relations with our U.S. consumers,” he said.

“This whole thing — it’s a mess in a way — is really putting some stress, some tension on this relationship.”

The U.S. is the No. 1 market for French wine exports, and Moreau estimates the tariffs could cost him 80,000 euros ($90,000) in revenue over the next six months, a 20% loss of his U.S. business.

French wine exporters group FEVS asked for government help to compensate for an expected drop in sales as American consumers shun French varieties for cheaper wines from the U.S. or elsewhere.

And it’s not just France.

At Rome’s Testaccio market, which is packed with wheels of Parmesan and strung with cured meats, food shop owner Enzo Paoloantoni urged Italian politicians to fight harder to protect Italy’s economic interests.

Paoloantoni joked that “Trump was very nice to help Italians” by slapping tariffs on world-renowned delicacies that Italy prides itself on.

Italy’s main farm lobby has forecast a 20% drop in sales of agricultural products that represent half a billion euros in export value, and called on the government to help promote Italian goods in other export markets instead.

German Riesling white wine is among the many products that’s about to get more expensive for American shoppers. Germany’s government isn’t happy, but is staying prudent for now.

“We regret that it’s come to the imposition of tariffs by the U.S., because the U.S. is of course harming itself, too, in the end,” Economy Ministry spokeswoman Beate Baron told reporters in Berlin. “Higher tariffs will weigh on the U.S. economy and U.S. consumers.”

The tariffs come at a particularly bad time for French winemakers, who also feel threatened by Brexit, a contracting global economy, and a changing climate that is altering harvest patterns.

Wine association representatives have been meeting with French government officials to try to find ways to defer paying the tariffs, Moreau said.

On Friday, as the new rules took effect, workers in Moreau’s warehouse packaged more than 1,000 bottles for export — to Canada.

The Department of Agriculture is moving forward with select trade aid provision in buying U.S. lamb products. USDA’s Agricultural Marketing Service recently announced the food purchase of up to $17 million of American lamb for distribution to various food nutrition assistance programs.

The products include, but are not limited to, boneless lamb leg roasts and boneless lamb shoulder roasts. The Chief Economist’s office determined the amount to be spent on American lamb. The $17 million allotted is a larger amount than USDA has spent in previous lamb buys.

The American Sheep Industry Association is helping facilitate the program between USDA and sheep producers. Meanwhile, the broader trade aid effort, including payments to farmers, remains unclear. USDA had planned another payment to producers this fall, with a final payment early next year.

However, a breakthrough in talks with China, and the Japan agreement signed last week, could mean the payments are no longer needed in the eyes of the Trump administration and farmers.

TRUMP: “The deal I just made with China is, by far, the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country.” — tweet Saturday.

TRUMP: “Start thinking about getting bigger tractors!” — tweet Saturday.

THE FACTS: Not so fast. No final trade agreement has been reached.

It’s true that U.S. and China declared a temporary truce in their 15-month trade war. As part of a cease-fire deal announced Friday, China agreed to buy up to $50 billion in U.S. farm products, while the Trump administration said it would suspend a tariff increase on $250 billion worth of Chinese imports that was set to take effect Tuesday.

However, negotiators reached their tentative agreement only in principle. No documents have been signed. A final deal could still fall through, though Trump told reporters Friday he didn’t think that would happen.

Many of the details remained to be worked out. Some of the thorniest issues — such as U.S. allegations that China forces foreign companies to hand over trade secrets — were dealt with only partially, or not at all, and will require further talks.

“The president is acting as if a lot of Chinese concessions have been nailed down, and they just haven’t,” said Derek Scissors, a China specialist at the conservative American Enterprise Institute.

The administration still has in place tariffs on more than $360 billion worth of Chinese imports. Beijing has lashed back by taxing about $120 billion in U.S. goods, focusing on soybeans and other agricultural products.

Meanwhile, the threat of escalation still hangs over the two countries. Trump has yet to drop plans to impose tariffs that are set to take effect Dec. 15 on an additional $160 billion in Chinese products — a move that would extend the sanctions to just about everything China ships to the United States.

China wants further talks as soon as the end of October to hammer out the details of the “phase one” trade deal touted by Donald Trump before Xi Jinping agrees to sign it, according to people familiar with the matter, Bloomberg News reports.

Beijing may send a delegation led by Vice Premier Liu He, China’s top negotiator, to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit next month in Chile, one of the people said. Another person said China wants Trump to also scrap a planned tariff hike in December in addition to the hike scheduled for this week, something the administration hasn’t yet endorsed. The people asked not to be named discussing the private negotiations.

USDA Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney will lead a trade mission to Vietnam on October 15-18.

It’s a large trade mission as McKinney will be accompanied by almost 80 industry and government representatives looking to grow agricultural export opportunities into one of the fastest-growing regions in the world. The mission will be based in Ho Chi Minh City, and it will also include buyer delegations from Thailand and Burma.

“The size of this trade mission speaks to the phenomenal potential that exists for U.S. exports in Vietnam and the surrounding countries,” McKinney says. “Since the United States normalized relations with Vietnam in 1995, our agricultural exports have grown exponentially, reaching a record $4 billion last year.” Sales of U.S. food and farm products to Thailand and Burma also set records last year, reaching more than $2.1 billion and $126 million, respectively.

The heads of six state departments of agriculture from Montana, New Mexico, North Dakota, South Dakota, Texas, and Wyoming will join McKinney on the trip. Officials from agriculture companies and commodity organizations will also be making the journey to Asia with McKinney.

China has recently been buying a lot of meat. The Wall Street Journal says their recent purchases are pushing up the prices of beef, pork, and poultry around the globe.

Meat buyers are increasing their activity after African Swine Fever hit the country hard and reduced the size of the world’s largest pig herd by more than a third. Domestic pork prices have jumped in China and meat imports are rising in response and placing a strain on global meat supplies. For example, Brazil poultry shipments to China have jumped 31 percent compared to last year.

Retail prices for chicken breasts, thighs, and legs have increased roughly 16 percent. European meat buyers are paying five percent more for pork because more of their domestically produced supplies are heading to China. American shoppers haven’t felt the impact yet, but that may change.

Futures prices recently rose after Chinese officials say the country could exempt some U.S. pork and other agricultural goods from punitive tariff increases. Many American meat companies have watched as European and South American competitors have raced each other to supply China’s pork needs.

Trade talks continue this week between the U.S. and China as the U.S.-Mexico-Canada Agreement inches closer to reality. President Donald Trump says talks last week between the U.S. and China “were very positive.”

Negotiations will continue this week ahead of high-level talks planned sometime next month. A Chinese delegation canceled U.S. farm visits last week, but apparently not because of the ongoing trade negotiations. Officials say the trips were canceled to avoid excessive media attention. Meanwhile, Democrats in the House of Representatives plan to submit a counter proposal to the White House this week on changes to USMCA, according to Politico.

House Ways and Means Chairman Richard Neal says the USCMA working group would meet with U.S. Trade Representative Robert Lighthizer this week to “intensify the discussion.” Neal is hopeful the group and Lighthizer can “strike a deal soon,” that allows the House to vote on the agreement. Neal says the concerns raised by Democrats are not resolved but added the Trump administration has “made substantial progress.”

Reuters says 44 members of Congress are asking U.S. Trade Representative Robert Lighthizer to restore trade concessions to India.

They say the U.S. withdrawal of that trade privilege has led to retaliatory tariffs, which hurt the U.S. ag industry. Back in June, the United States ended its preferential trade treatment for India. The Generalized System of Preferences Program allowed India to send up to $5.6 billion worth of imports into the United States duty-free. India retaliated with higher tariffs on 28 U.S. products, including almonds, apples, and walnuts.

The letter from the U.S. lawmakers to Lighthizer says a lot of American jobs depend on trade between India and the United States. After President Trump decided to remove India from trade privileges, American and Indian trade negotiators met in July. However, neither side made much progress on the issue of tariffs and other protectionist measures imposed by each side.

The U.S. and India resumed trade talks after meetings on the sidelines of the G20 summit in June and agreed to take steps to deepen the two countries’ relationship.

The White House has notified Congress it will sign a trade agreement with Japan. President Donald Trump notified lawmakers he will enter an agreement on tariffs and digital trade with Japan, as the two sides wrap up the talks still this month.

Trump told lawmakers he is “pleased to report that my administration has reached an initial trade agreement.” The agreement is expected to be signed along the sidelines of the United Nations General Assembly in New York this month. The agreement does not need approval from Congress and can go into effect immediately.

The agreement will mostly lower tariffs on U.S. ag products, to levels granted to other exporters to Japan in the Comprehensive and Progress Agreement for Trans-Pacific Partnership. The lower tariffs allow U.S. farmers to better compete in the Japanese market. Top U.S. agricultural exports to Japan currently include beef, corn, pork, soybeans and wheat, totally $13 billion last year.

House Appropriations Committee Chair Nita Lowey of New York is proposing to block a White House request regarding its farm trade aid program. A Washington Post review of the draft legislation says it would potentially mean trouble for President Trump’s ability to direct aid payments to thousands of American farmers.

A key Republican lawmaker says the Democrat’s move could potentially stall a key bill needed to avoid another government shutdown. The farm bailout is one of several unresolved issues that lawmakers will have to work through to meet a deadline by the end of this month. Up until now, the payments haven’t needed congressional approval.

However, the timing of the next round of payments is directly tied to approval from Congress. The USDA is planning to spend about $28 billion in payments over two years. However, the program Trump is using for the payments has a $30 billion spending limit, which they’re expected to hit this year before completing the second round of payments. Republicans have said they won’t support the government funding bill if it leaves the farm payment issue unresolved.