Countries Asking U.S. for Tariff Exemptions
European Union Trade Commissioner Cecilia Malmstrom is continuing to petition the United States for exemptions to the upcoming steel and aluminum tariffs. Politico quotes her as saying the tariffs will shake the transatlantic relationship between the countries if they go into effect. She told Commerce Secretary Wilbur Ross during a phone call that the EU “as a close security ally of the U.S., expects to be fully excluded from these measures as a whole.” Brazil’s Ambassador to the U.S. recently laid out an argument that could possibly fit well with the five criteria the U.S. is said to be looking at in the exemption process. The lobbying blitz to avoid the upcoming tariffs also includes Hong Kong. That country’s Secretary of Commerce and Economic Development implored the U.S. to exempt the island nation from the “totally unjustified” aluminum duties until they can engage in a full dialogue with the U.S prior to any unilateral action. The Secretary points out that Hong Kong is the economy with which the U.S. has the highest trade surplus. Hong Kong will fight the duties both at the World Trade Organization level, where it’s already expressed formal concern, as well as through bilateral discussions with the U.S.
Senate Finance Committee Wants to Talk Trade, Tariffs
The Senate Finance Committee will hold a hearing next Thursday, March 22, regarding the Trump Administration’s trade policy. The Hagstrom Report says that U.S. Trade Representative Robert Lighthizer will be the lone witness at the proceedings. The committee chair, Republican Orrin Hatch of Utah, has been critical of President Donald Trump’s announced trade tariffs. Hatch says in a news release, “After the biggest tax rewrite in more than three decades, it is essential that the president’s trade agenda builds on the pro-growth, pro-jobs success.” Hatch says he and Trump both share the same goal of making trade work for all Americans. The best way to do that is by pursuing new trade deals that will open up new markets for American goods and services, boosting access to new customers. Hatch adds, “I have made it clear that tariffs are nothing but a tax on American businesses and consumers and I look forward to discussing with Ambassador Lighthizer how the administration can mitigate the damage they cause. Committee members will also have the opportunity to ask the ambassador more about how the administration would use an extension of bipartisan Trade Promotion Authority, which it requested in its Trade Policy Agenda.”
South Korea Adopts New Poultry Import Policy
The South Korean Ministry of Agriculture has adopted a new regionalization policy that is good news for the U.S. poultry and egg industry. The new policy prevents a countrywide ban on U.S. exports to Korea in the event of a future finding of Highly Pathogenic Avian Influenza. Should a case be found in the future, only exports from each affected state will be restricted. That will allow the U.S. to continue shipping poultry and egg products to the Korean market. National Chicken Council President Mike Brown says the U.S. has one of the most stringent surveillance, eradication, and monitoring programs in the world when it comes to avian diseases. “I want to thank our administration for their efforts in working with the South Koreans to adopt this policy of regionalization,” says Brown. Jim Sumner, president of the USA Poultry and Egg Council, says the U.S. now becomes the world’s most reliable supplier of poultry products to Korea. Korea was on track to become one of the biggest export markets for U.S. poultry products when the U.S. was hit by an outbreak of avian influenza in 2014 and 2015. Korea put bans on all poultry and egg exports from the U.S., even though only certain states were affected.
Justice Department Not Satisfied With Bayer/Monsanto Proposals
Bayer’s plan to get antitrust approval from the U.S. Justice Department hasn’t satisfied the expectations of U.S. officials. Two sources told Bloomberg that those officials are worried that the merger could hurt competition. The department feels the Bayer proposal to sell off assets doesn’t go far enough. The U.S. government wants Bayer to sell off more of its assets in order to resolve its concerns. While negotiations between the two sides are continuing, those sources tell Bloomberg that a settlement is still likely months away. Representatives for Bayer, Monsanto, and the Justice Department all declined to comment on the story. Bayer’s $66 billion takeover of Monsanto is part of a recent wave of consolidation in the agriculture seed and crop chemical firms. The companies are still seeking approval from U.S. and EU regulators after two other major deals were approved. Those combinations were Dow Chemical and DuPont, as well as China National Chemical Corporation and Syngenta.
EPA Proposes Reduction in Required RIN Credits for Philly refinery
The Environmental Protection Agency made a proposal to lower the number of biofuel credits that bankrupt oil refiner Philadelphia Energy Solutions must buy under the Renewable Fuels Standard. The nation’s biofuels groups are very concerned about that idea. Renewable Fuels Association President Bob Dineen feels a move like that could potentially set a very bad precedent and encourage other biofuels opponents to manipulate the process to get out of similar obligations. Dineen says the refinery’s regulatory requirements don’t just include the RFS, but there are other fuel regulations like reformulated gasoline, benzene, air toxics, detergents, vapor pressure, diesel, and sulfur content. “All of those contain similar liability requirements to ensure that environmental goals are reached, and with this potential move by the EPA, it puts all of those requirements equally at risk,” Dineen says. The EPA’s proposed settlement says PES is charged with retiring 138 million Renewable Identification Numbers. Philadelphia Energy Solutions blames its bankruptcy on the high cost of RINs, but biofuels opponents have disputed those claims. Growth Energy CEO Emily Skor says the Carlyle Group-backed firm shouldn’t get a free pass for pulling hundreds of millions of dollars out of the refinery, hurting its own workers. The settlement is open to public comments for the next ten days.
Rural Mainstreet Index Remains Positive
The Creighton University Rural Mainstreet Index slipped in March but remained above growth neutral for a second-straight month. Those results come from the monthly survey of bank CEOs in rural areas of a 10-state region that depends on agricultural. It’s the first time since the middle of 2015 that the index has shown two straight months of readings above growth neutral. The index dipped slightly from 54.8 in February to 54.7 in March. The index range is zero through 100, with 50 representing growth neutral. Ernie Goss oversees the index and says, “Surveys over the past several months indicate that the rural economy is trending upward with improving, but slow economic growth.” However, he says weak commodity prices continue to weigh on the overall rural economy. Jim Eckert, President of the Anchor State Bank in Illinois, says recent commodity price increases have helped the mood of their area farmers. He did say the state will need good spring rains for the crop to get off to a solid start. On the downside, bankers in the survey project that 16.8 percent of grain farmers will experience negative cash flow in 2018.