In an escalating trade war, it would appear the cavalry is en route for U.S. agricultural producers.
USDA will authorize up to $12 billion in programs designed to help U.S. agricultural producers contend with tariffs instituted by China on U.S. goods, according to a press release issued by the agency July 24. The $12 billion is in line with the estimated $11 billion impact of the Chinese tariffs, and is expected to help producers navigate disrupted markets.
Specifically, the program will include three aspects:
“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” USDA Secretary Sonny Perdue said. “The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong. Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China's illegal trading practices and have taken a disproportionate hit when it comes illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programs we are announcing today help ensure our nation’s agriculture continues to feed the world and innovate to meet the demand.”
Responses to aid were mixed. “While we’re grateful the administration is doing something, we’re hopeful these tariff issues will be resolved soon because farmers would rather trade than take aid,” said Joel Rotz, Pennsylvania Farm Bureau spokesman, reported TribLive (July 24). Many other agricultural professionals expressed a similar mixture of relief and worry regarding the tariff situation.
The announcement comes as the EU explores its own options. The EU indicated it is ready to launch tariffs on U.S. products worth $20 billion if the U.S. institutes a tariff program on European goods. The EU Trade Commissioner noted the tariffs would affect a variety of industries, including agriculture, reported Yakima Herald-Republic (July 25).
As always, stay tuned to the Food Institute for more information regarding the developing tariff situation.
In The Food Institute's recent webinar "Achieving a self-sustaining business model: Top 3 trends companies need to think about post-COVID-19," Greg Wank, CPA, CGMA, partner and leader of Anchin's food and beverage group, as well as David Eben founder and CEO of Carrington Farms,...read more
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at email@example.com to talk about anything food-related.
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