In this file:
Tariff Tirade — Genius or ?
· Tariffs Used as Bargaining Tool for NAFTA Negotiations
· Trump Tariffs May be Good for NAFTA Talks
· China Minister Says Trade War Would Bring ‘Disaster’ to World
· China says U.S. soybeans 'prime target' over tariffs: trade group
Tariff Tirade — Genius or ?
By Steve Kopperud, Brownfield
March 9, 2018
I hate to say this – I know the trade junkies in town will want to smack me silly for saying it – but I’m almost beginning to enjoy how President Trump handles trade policy. Not that I agree with the specifics of some of his pronouncements, but the process by which he gets from Point A to Point B fascinates and entertains me.
What some see as genius, some find frightening and frustrating. The increasingly familiar administration strategy – threaten the worst to up the chances of producing the best – routinely has the president brushing off warnings of global trade wars. Such events are “easy to win,” he tweeted at one point. Agriculture sees trade policy schizophrenia as risky; sweeping action, accompanied by flag waving, but which ultimately exposes ag to a blitz of costly retaliatory tariffs from trading partners despite the president’s professed affection for rural America.
The last 10 days of the steel and aluminum tariff kerfuffle are a good example. On March 2, the president shocked industry, Congress and his own inner circle by dropping the bunker buster of trade bombs, announcing his intent beginning March 23, to impose 25% tariffs on all steel imports to the U.S., along with a 10% tariff on all aluminum imports, citing “national security” as his raison d’etre. His folks explained Sec. 232 of the Trade Expansion Act of 1962, gives Trump authority to “investigate” U.S. imports to determine if a product or products negatively impact “national security.” Trump said his steel/aluminum decision is predicated on the outcome of a nine-month Department of Commerce (DOC) investigation finding U.S. steel imports are four times this country’s exports, and aluminum imports made up 90% of total domestic demand for primary aluminum.
The president’s primary target is Chinese steel exports, which domestic industry contends have flooded world markets and driven down prices. Chinese production alone surpasses that of the U.S., Russia, Japan and the European Union (EU) combined. Trump’s hoped-for secondary “win” is leveraging NAFTA 2.0 negotiations to include more U.S. priorities by forcing Canada to see the wisdom of several U.S. positions. Canada, after all, is the number one steel exporter to the U.S.; Mexico is number four.
Within a week, however, Trump’s set-in-stone position on global steel/aluminum tariffs morphed into what some analysts call a very elaborate and melodramatic “warning” to U.S. trade partners. Despite declarations of “I won’t back off,” “no exceptions,” and “this will move forward,” the president explained to the press before a weekly cabinet meeting that the national security predicate of his tariff move gives him “a right to go up or down (with tariff rates) depending on the country, and I’ll have the right to drop out countries or add countries – we just want fairness.” Let the international steel/aluminum tariff exclusion scramble begin.
Key to the Trump strategy is to keep trade partners guessing as to just how serious is the White House in seeking to punish nations it believes are taking unfair advantage of U.S. markets. Agriculture Secretary Sonny Perdue said, “He’s got some countries just where he wants them,” meaning major trading partners are “off-balance” as to the real meaning of actions like the steel/aluminum tariffs. “Let’s use this off-balance technique to decide what we’d like in exchange…whether it’s with Mexico, Canada or EU partners,” the ag secretary elaborated.
Perdue, a consistent voice of reason over time in White House trade tug-of-wars and a cabinet secretary not timid in reminding Trump for whom farmers and ranchers voted in 2016, said producers are “rightfully concerned” about trade partner retaliation against agriculture exports, but said “If this has an impact on us completing a beneficial NAFTA deal for U.S. producers, that’s a great result. We’ve got a lot of flexibility built into the tariffs. We’re going to use this to get NAFTA done,” Perdue said.
Trump compounded the situation when he casually mentioned Canada and Mexico will escape the tariffs. His formal pronouncement included word Canada and Mexico received exemptions for at least 30 days because “if we reach a deal (on a new NAFTA treaty), we won’t be charging those two countries the tariffs.” This translates to the Trump version of “our way or the highway,” when it comes to a final NAFTA agreement on ag issues, including Canadian dairy pricing and supply management, Mexican seasonal fruit/vegetable anti-dumping complaints and Canadian wheat export subsidies.
Other exempted nations...
Tariffs Used as Bargaining Tool for NAFTA Negotiations
Traci Eatherton, Tri-State Livestock News
March 9, 2018
North American Free Trade Agreement (NAFTA) negotiations have been ripe with uncertainty following the seventh round at the table, this time in Mexico City, after President Donald Trump's announcement of plans to impose tariffs on Canadian and Mexican steel and aluminum.
On Thursday, Trump put the tariffs in place, exempting Mexico and Canada. An exemption will give the neighboring countries at least temporary relief from the 25 percent tariff on steel and 10 percent levy on aluminum.
During the signing ceremony at the White House, Trump's tone on NAFTA was positive. However, he reiterated the possibility of pulling out of NAFTA.
"I have a feeling we're going to make a deal on NAFTA," Trump said. "And if we're making the deal on NAFTA, this will figure into the deal and we won't have the tariffs on Canada or Mexico."
Tariffs on Canadian and Mexican steel have become a bargaining tool for whether or not a trade pact can be reached according to negotiators. In his twitter feed, Trump sent a message that the tariffs were a leverage tool in the negotiation. Trump tweeted that steel and aluminum tariffs would only come off if a new NAFTA is signed.
Both Canada and Mexico authorities rebuffed Trump's plan. Mexican Economy Minister Ildefonso Guajardo told Reuters, "Under no circumstance will we be subject to any type of pressure." And Canadian Trade Minister Francois-Phillippe Champagne told Reuters his country would not accept any duties or quotas from the United States.
Canada, the European Union, and Mexico have hinted at retaliatory measures if the tariffs are imposed. And the World Trade Organization has expressed concern about an escalating tit-for-tat scenario, to the detriment of a number of countries.
Some trade consultants and experts are calling the leverage ploy illegal. But supporters say the threatened tariffs are based on a 1962 U.S. law that allows the president to invoke urgent measures in matters of national security. Trump views jobs in the steel industry as an economic-security issue, and therefore a national-security issue.
The plan has also not set well with some in the Republican party...
Trump Tariffs May be Good for NAFTA Talks
By Gary Truitt, Hoosier Ag Today
Mar 11, 2018
The media drumbeat of condemnation of the tariffs on steel and aluminum announced by President Trump on Tuesday continued over the weekend as world leaders publicly denounced the policy. Yet privately, many nations are moving to consider trade concessions that would exempt them from the U.S. tariffs. Canada and Mexico were temporarily exempted pending a NAFTA agreement and rumors over the weekend indicated Australia may be next to escape.
In signing the order last week, the President made it clear that if Canada and Mexico made concessions during the NFTA negotiations, they would be exempted from the tariffs. “Right now we are negotiating NAFTA with Canada and Mexico, so we are holding off the tariffs to see if we can make a deal on a new NAFTA treaty,” he stated. The president made it clear, however, that if a deal is not reached, the tariffs would be imposed, “If we terminate NAFTA because they are unable to make a deal that is fair for our workers, fair for our farmers, and fair for our manufacturers, then we will terminate NAFTA and start all over again.”
While that kind of talk makes agriculture very nervous, Mr. Trump said he is optimistic there will be a NAFTA deal, “I have a feeling we are going to make a deal on NAFTA.”
Canada has been particularly recalcitrant in making any concessions on its dairy policy, a key issue for the U.S. where dairy producers are suffering economically. The White House is hoping the threat of steel tariffs will help break the logjam in the talks. The talks had been scheduled to end this month, but all sides plan to keep working to try to reach an agreement no matter how long it takes.
In seeking to win a respite from the tariffs, American allies tried a mix of persuasion, threats, personal appeals, and diplomatic leverage. On Saturday, Cecilia Malmström, the European Union’s trade commissioner, met with the United States trade representative, Robert Lighthizer, in Brussels, after a meeting that also included Japan to talk about steel overcapacity. There was no resolution of the tariffs issue, however. European Union countries have been compiling a list of American products that could be subject to reciprocal levies. The provisional list correlated strongly with Republican congressional districts and included...
China Minister Says Trade War Would Bring ‘Disaster’ to World
Zhong says U.S. trade deficit with China overestimated by 20%
U.S., China trade tenions intensified after Trump tariffs
March 10, 2018
China’s trade minister Zhong Shan warned that a trade war with the U.S. would bring disaster to the global economy, but said his nation won’t start one and that talks with the Trump administration continue.
"There is no winner in a trade war," Zhong said at a press conference in Beijing Sunday. "A trade war will only bring disaster to China, U.S. and the global economy. China doesn’t want a trade war, and will not start a trade war first. But we can handle any challenge, and will firmly defend the interests of our nation and our people."
Zhong added that the U.S. trade deficit with China is overestimated by about 20 percent, citing research by a panel tasked with investigating the discrepancy between the two nations’ accounts of their trade balance. The deficit could be reduced by 35 percent if the U.S. eased export controls on high-technology products to China, he said, citing unspecified U.S. research.
Trade tensions between the world’s two biggest economies intensified last week as President Donald Trump signed orders for stiff tariffs on steel and aluminum and indicated more actions are potentially on the way. The U.S. administration asked China for a plan to cut the annual U.S. trade deficit with the nation by $100 billion, a White House official said Friday.
As China’s exports surged in February its monthly surplus with the U.S. widened from a year earlier to $20.96 billion...
China says U.S. soybeans 'prime target' over tariffs: trade group
P.J. Huffstutter, Reuters
March 9, 2018
CHICAGO (Reuters) - Chinese officials have said U.S. soybeans are a prime target for retaliation against tariffs imposed by the Trump administration on steel and aluminum imports, according to the American Soybean Association.
Farm groups have long feared that China, which imports more than third of all U.S. soybeans, could slow their purchases of agricultural products, heaping more pain on the struggling U.S. farm sector.
Warnings to the soybean growers group about their product being used as a target in trade disputes were made last year, group officials told Reuters on Friday.
They came up in talks between the American Soybean Association’s leaders and officials at the Chinese embassy in Washington and in conversations between Chinese officials and U.S. soybean farmers, when the farmers were on a trip to China last fall, according to the group.
“We have heard directly from the Chinese that U.S. soybeans are prime targets for retaliation,” the trade group said in a statement. “The idea that we’re the only game in town, and these partners have no choice but to purchase from the U.S. is flatly wrong.”
Officials declined to elaborate further. The Chinese embassy in Washington did not respond to a request for comment on Friday...