US, China Trade Dispute Evolved Over Past Year
By Chris Clayton, Progressive Farmer/DTN
OMAHA (DTN) -- A year since the U.S. and China began a tit-for-tat of tariffs, talks and tweets, American farmers are seeing more diversified export routes while waiting for their largest customer to fully return.
The shift was dramatic as the country's top U.S. agricultural export market fell back and President Donald Trump's administration committed billions of dollars to help farmers make it through the tariff dispute.
The tariff battle over the past year has forced U.S. exporters to redirect their focus away from China, which had been the dominant growth market for agricultural exports for more than a decade. In 2017, China imported $23.8 billion in U.S. agricultural products. It was the No. 1 market for soybeans, feed, animal hides and alfalfa; No. 2 in hay; No. 3 in dairy, poultry and pork.
For 2018, agricultural sales to China fell to $9.3 billion, the lowest since 2007.
John Heisdorffer, an Iowa farmer and chairman of the American Soybean Association, said he didn't expect to be holding an anniversary for the tariffs. "I actually thought by fall we would have this settled. I never dreamed it would be a year later and really not a lot closer than where we were then."
The U.S. and China kicked off $34 billion of new tariffs each on July 6 last year. The tariff put a 25% penalty on Chinese importers of U.S. soybeans.
As of now, the U.S. has 25% tariffs on $50 billion in Chinese goods and 10% tariffs on $200 billion in products.
China has retaliatory tariffs ranging from 10% to 50% on $110 billion in U.S. goods.
The U.S. government has spent $8.58 billion on U.S. farmers under the Market Facilitation Program (MFP) with a commitment to spend another $16 billion starting later this month.
After last weekend's G-20 summit, President Trump said talks between the U.S. and China are restarting. White House trade adviser Peter Navarro told CNBC on Tuesday the talks remain complicated. Navarro also reiterated that China would be buying more agricultural products during the talks. According to CNBC, Navarro said the agricultural purchases would be "immediate" and "significant."
The trade dispute, which began over the U.S. trade deficit and Chinese theft of intellectual property from U.S. businesses, has become increasingly complicated. Trade tensions now revolve heavily around how the U.S. treats Huawei Technologies Co., a high-tech company serving global broadband networks. China wants the Trump administration to drop sanctions against Huawei while the U.S. is trying to restrict Huawei's access to U.S. businesses working on 5G data networks. Republican senators Marco Rubio and Rick Scott of Florida both tweeted over the weekend that trade talks with China should not lead to easing sanctions against Huawei.
"President Trump needs to stand strong against Huawei and stay consistent in making sure they have ZERO access to the U.S. market," Sen. Scott tweeted Sunday. "It's clear that Huawei has the capacity and the desire to steal our private information and use it against us."
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