Agriculture Applauds Phase One China Deal, Awaits Tariff Removal

On Wednesday President Donald Trump and Vice Premier Liu He signed the Phase One portion of the trade deal between the U.S. and China. As expected, the agriculture industry was thrilled.

NCGA president Kevin Ross attended the signing ceremony and praised the deal in a statement following the occasion.

“Signing the phase one agreement with China is a step in the right direction to resolving the trade dispute with China and restoring the trading relationship between our two countries,” he said. “China holds tremendous opportunity for American corn, ethanol and DDGs and NCGA looks forward to learning further details of what phase one will mean for these products. As more specifics become available, we will closely monitor implementation to ensure that the commitments are upheld and that U.S. corn farmers resume trading with Chinese customers. NCGA urges the Administration to quickly commence phase two negotiations and work to resolve retaliatory tariffs.”

NCBA praised the deal saying it will lay the groundwork for American-produced beef to be highly competitive in the world’s most populous market.
 
“The Phase-One Agreement with China will be a game changer for the U.S. beef industry," said NCBA President Jennifer Houston, who joined President Trump at the White House for today's event. "For many years, Chinese consumers have been denied access to high-quality U.S. beef—the same U.S. beef we feed to our families. The removal of these massive trade barriers gives Chinese consumers access to the U.S. beef they desire, and it gives America’s cattlemen and cattlewomen the opportunity to provide U.S. beef to a growing consumer-base that represents one-fifth of the global population and a middle-class that is greater than the entire U.S. population.

Dairy farmers were also thrilled with the deal. 

“Today’s announcement of a deal that makes progress on regulatory restrictions and othr nontariff barriers hindering dairy trade is a positive step forward. These are important deliverables that USDEC has been pressing China for over the course of the last few years,” said Tom Vilsack, president and CEO of USDEC. “We need to continue to work with our government, China’s government and our customers to finish the job by lifting the remaining Chinese retaliatory tariffs against our exports.” 

Randy Mooney, dairy farmer from Rogersville, MO and Chairman of NMPF, who joined President Trump and administration officials at the White House signing ceremony said America’s dairy farmers have been disproportionally harmed by China’s retaliatory tariffs, and we cannot ask our farmers to continue operating under this financial uncertainty. 

“We appreciate the hard work invested by both the U.S. and Chinese governments, but we urge China to swiftly lift all retaliatory tariffs against U.S. dairy products and work with U.S. suppliers to fulfill their purchasing commitment,” he said.

While details on how the deal will impact dairy producers are still unclear, the deal does make progress on nontariff barriers including: tackling facility and product registration steps that have stymied firms seeking to export to China for several years; improving the regulatory pathway for exports of infant formula and fluid milk (including extended shelf life milk) to China; creating new transparency and due process obligations regarding geographical indications and common food names; and the promise of increased purchases of U.S. agricultural goods, including dairy.

Hog producers congratulated the administration for signing the deal and said they are positioned to address the unprecedented sales opportunity for U.S. pork into China because of African swine fever. To take advantage of this opportunity pork producers need China to eliminate tariffs on U.S. pork says David Herring National Pork Producers Council (NPPC) President and N.C. farmer.

"While China's phase one commitments are welcomed, U.S. pork exports continue to be suppressed because of the country's 60 percent punitive tariffs. In order to fully capture the benefits of this deal, we need China to eliminate all tariffs on U.S. pork for at least five years,” Herring said. “According to Iowa State University Economist Dermot Hayes, if U.S. pork gets unrestricted access to the Chinese market, it will reduce the overall U.S. trade deficit with China by nearly six percent, generate 184,000 new U.S. jobs and produce $24.5 billion in new pork exports all within the next decade. However, if the U.S. continues to face 60 percent punitive tariffs (and a cumulative tariff of 68 percent), while our competitor nations are assessed an 8 percent tariff, U.S. pork sales will be suppressed as China imports more pork from other nations."

Similarly, wheat producers hope to see wheat exports increase when tariffs are removed. 

“Even though China has huge domestic wheat stocks, they were buying more U.S. wheat because they needed it to meet growing demand for higher quality wheat foods,” said Vince Peterson, President of U.S. Wheat Associates (USW), the organization funded by farmers and the U.S. government to promote wheat exports. “The losses we demonstrated soon after China stopped importing U.S. wheat have only grown since then, so we hope the agreement signed today signals a potential turn-around.” 

While the details of agricultural purchases will not be disclosed, Growth energy, the nation’s largest ethanol association, applauded the deal.

“The signing of the Phase One trade agreement with China today is another positive step towards restoring market confidence for U.S. biofuel producers,” said CEO Emily Skor in a statement. “We’re grateful to U.S administration officials for their continued work on securing this trade agreement at such a pivotal time for our nation’s agriculture and renewable energy industries. Breaking down trade barriers between our nations will provide a valuable opportunity to restore demand for American biofuel, and we hope to soon see biofuels and DDG exports back on the Chinese market.”

American Farm Bureau Federation President Zippy Duvall said today’s signing is an important step in giving America’s farmers and ranchers the ability to get back to business in the global market.

“This is a great way to start the new year, but there is more work to do. We encourage the Senate to pass the U.S.-Mexico-Canada Agreement to increase export opportunities with our North American neighbors," he said. "We also look forward to additional trade agreements with countries that are locking-in deals with our competitors. This must be a focus in 2020.”