Tuesday, October 3, 2023

U.S. – China trade dispute continues to escalate

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By Barbara Olejnik

Poultry Times staff


GAINESVILLE, Ga. — The U.S. and China continue to engage in a tit-for-tat retaliatory imposition of trade tariffs on imported goods from each country.

In the latest move on the trade battle between the two countries, President Donald Trump, on July 6, added 25 percent duties on $34 billion worth of Chinese goods with a promise to bring that up to $50 billion.

This prompted China to retaliate with previously threatened penalties on an equal amount of U.S. exports, including pork, beef, soybeans and automobiles.

President Trump has also moved forward with plans to impose another 10 percent on $200 billion worth of Chinese imports.

The president ordered the latest tariffs in response to China’s intellectual property policies, including compulsory licensing requirements that force foreign companies to surrender their trade secrets in return for access to the Chinese market.

U.S. Trade Representative Robert Lighthizer noted that “For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market and engage in true market competition. We have been very clear and detailed regarding the specific changes China should undertake. Unfortunately, China has not changed its behavior — behavior that puts the future of the U.S. economy at risk. Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action.”

The tariffs seek to reduce the $375 billion trade deficit the U.S. has with China.

In yet another move aimed at reducing this deficit, President Trump has indicated he is willing to hit every product imported from China with tariffs.

In an interview with TV Channel CNBC, the president said “I’m willing to go to 500,” referring to the $500 billion in goods imported from China in 2017.

“I’m not doing this for politics, I’m doing this to do the right thing for our country,” Trump said. “We have been ripped off by China for a long time.”

China has responded to the latest U.S. tariffs with penalties on U.S. goods including pork, beef and soybeans.

The imposition on increased duties on imported goods from China has raised concern by U.S. industries, particularly the agricultural sector.

U.S. soybean farmers have been especially concerned as the price of soybeans has dropped by 17 percent during the past month.

U.S. Senators Tom Carper and Chris Coons and Congresswoman Lisa Blunt Rochester, all Democrats of Delaware, sent a letter to U.S. Agriculture Secretary Sonny Perdue expressing concern about how trade actions are harming Delaware’s soybean growers.

The legislators said the Trump administration’s recent trade actions against China have resulted in a retaliatory 25 percent tariff on U.S. soybeans.

“We urge Secretary Perdue to ensure that the administration takes actions to mitigate the effects of the tariffs on farmers and resolve its trade dispute with China,” the Delaware legislators stated.

The National Pork Producers Council has said that because of escalating trade disputes, pork producers face large financial losses that could result in some of them going out of business.

U.S. pork producers now face punitive tariffs of 62 percent on exports to China, a market that represented 17 percent of total U.S. exports by value in 2017, the pork council stated.

The council pointed out that Iowa State University economist calculated that from early March, when rumor of China’s initial retaliatory tariff were circulating, through May, producers lost $18 per hot, or more than $2 billion on an annualized basis.

The American Farm Bureau Federation has also weighed in on the situation, calling for a resumption of talks and an end to tariffs.

AFBF President Zippy Duvall stated, “Prices for all of our export-sensitive farm goods have tanked since May, when this tariff game started. Farm income was already off by half compared to four years ago, with debt levels rising — hardly a strong position for agriculture going into this trade war. This situation will only worsen as combines roll between now and the fall election season.

“The nation’s farmers and ranchers support the broader goal of strengthening our overall economy and trade balance, but not at the risk of long-term, irreparable harm to our ag exports and the jobs they create,” Duvall noted.

Congress may also get involved in the dispute.

Sen. Orrin Hatch (R-Utah) is contemplating legislation that would curb President Trump’s trade authority unless the imposition of tariffs is halted.

Hatch, the Senate Finance Committee chairman, said in a speech on the Senate floor, “if the administration continues forward with its misguided and reckless reliance on tariffs, I will work to advance trade legislation to curtail presidential trade authority.”

The Senate has already held a test vote on a measure that would give Congress more power over the president’s decisions to levy Section 232 tariffs over national security. An identical House bill has also been introduced.

While the trade arguments continue, there may be some signs that the two countries could again enter into negotiations over trade, according to a National Chicken Council report.

Treasury Secretary Steven Mnuchin indicated as much on July 12 when he said “To the extent that China wants to make structural changes, I and the administration are available.”

However, the secretary also said Beijing needs to commit to more economic reforms. “We are not advocating tariffs. We are advocating fair trade,” Mnuchin said.

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