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US and China Engaged in Trade War

Ag industry urges against additional Chinese tariffs

Agriculture industries advise alternative solutions in interest of rural communities.

The Office of the U.S. Trade Representative is set to begin public hearings from June 17 to June 21 and, the following week, from June 24 to June 25, considering the additional 25% tariffs on $300 billion in goods from China. Those representing agricultural groups are suggesting other methods of dealing with China besides applying tariffs.

The National Association of State Departments of Agriculture (NASDA) submitted comments to the Office of the U.S. Trade Representative reaffirming NASDA’s position that no increased tariffs should be applied to Chinese goods in the ongoing trade dispute between the U.S. and China.

“We agree with the Administration’s findings of China’s restrictive economic and trade policies. However, NASDA believes alternative steps, such as engaging a coalition of like-minded countries, is a better solution to advancing free and fair trade with China,” NASDA chief executive officer Barb Glenn said. “Trade actions that trigger retaliation threaten rural jobs and fall disproportionately on agriculture, with immediate, adverse effects that greatly outweigh benefits. There should be no increased or additional tariffs levied for the sake of our rural economy.”

The NASDA letter noted: "In regards to U.S. farm production, U.S. agricultural exports to China represented 5% of U.S. cash receipts in 2017. Specifically, the export:cash receipt ratio is 29% for soybeans and 51% for sorghum, making China a vital market for these two commodities and the hardworking American farmers who produce them. China also represents one of our best (if not the best) opportunities for major export growth in the near and long-term future."

NASDA urged forming international coalitions, starting comprehensive, bilateral negotiations, initiating an additional World Trade Organization case, investment restrictions or treasury sanctions as potential actions to try to persuade China to change its actions.

According to Trade Partnership Worldwide LLC, 25% tariffs on an additional $300 billion in imports from China (combined with the impact of already implemented tariffs and retaliation) would result in the loss of more than 2 million U.S. jobs, add more than $2,000 in costs for the average American family of four and reduce the value of U.S. gross domestic product by 1%.

“Furthermore, we have seen repeatedly that tariff increases and uncertainty around these trade negotiations have created turmoil in the markets, threatening our historic economic growth,” according to a letter signed by 661 American companies and associations, including the Tariffs Hurt the Heartland coalition, which is supported by 150 trade associations representing retail, tech, manufacturing and agriculture.

The letter stated that broadly applied tariffs are not an effective tool to change China’s unfair trade practices; rather, tariffs are taxes paid directly by U.S. companies, not China.

"We urge your Administration to get back to the negotiating table while working with our allies to develop global, enforceable solutions. An escalated trade war is not in the country’s best interest, and both sides will lose,” the companies and associations added.

After President Donald Trump and China's President Xi Jinping agreed to launch the current negotiations in Buenos Aires, Argentina, in December 2018, Trump postponed the increase in tariffs on Chinese imports for 90 days that was scheduled to go into effect on Jan. 1, 2019. The President extended the deadline again in March because the parties appeared to be making progress in their talks. 

“Following months of hard work and candid and constructive discussions, the parties had reached agreement on a number of important matters. In wrapping up the final important issues, however, the Chinese moved away from previously agreed-upon provisions. In response to this Chinese backtracking, the United States moved forward with the previously announced rate increase on Chinese imports and announced tariffs on additional Chinese imports,” USTR said in a recent statement.

“Our negotiating positions have been consistent throughout these talks, and China backpedaled on important elements of what the parties had agreed to. One such position was the need for enforceability -- a position necessitated by China’s history of making commitments that it fails to keep,” USTR added.

TAGS: Legislative
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