Two significant trade moves were made over the weekend which are generating mixed responses from the agricultural industry. First, an “agreement in principle” was reached between the U.S. and Japan which will lower Japan’s tariffs on American agricultural commodities. Several different commodity groups expressed various levels of support and excitement for improved trade relations with Japan. However, curbing some of the agricultural enthusiasm over the weekend was the escalation of the tariff war between the U.S. and China.
Prior to the weekend, China indicated it would be adding new tariffs between five and ten percent on $75 billion worth of American goods. President Donald Trump responded by announcing that tariffs on $250 billion worth of Chinese products will be increasing from 25 percent to 30 percent beginning on October 1. President Trump described the move as “a GREAT opportunity for the United States.”
By Sunday President Trump eluded to the possibility of declaring a national emergency in relation to the trade moves made by China. Despite noting the potential for declaring a national emergency, President Trump said that “actually we are getting along very well with China right now, we are talking. I think they want to make a deal much more than I do.” Signifying that each country wishes trade negotiations to progress, Chinese Vice Premier Liu He said during a technology conference that “we think an escalation of the trade war is against the interest of China, the U.S. and the entire world.”
The positive trade news from the weekend comes from improving relations between the U.S. and Japan. Essential elements of a trade deal that is expected to be signed sometime next month will open up Japanese markets for a variety of goods. U.S. Trade Representative Robert Lighthizer said that American beef, pork, dairy, wine, and grain producers should significantly benefit from the trade agreement. Multiple agricultural groups have expressed overwhelming support for the potential the new trade deal creates for American agriculture.
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