Trump Unveils Steel and Aluminum Tariff Plan
President Donald Trump Thursday unveiled his plan to impose 25 percent tariffs on steel imports and ten percent on aluminum. The plan includes provisional exceptions for Canada and Mexico. However, the tariffs could trigger a trade war between the U.S. and the European Union and China, among others. Despite a large pushback by U.S. industry and trading partners, Trump is forging ahead with the plan that will go into effect in 15 days. The EU plans to retaliate and a fight at the World Trade Organization is also possible. Agriculture and industry groups fear the retaliations will harm the U.S. export market, and the U.S. rural economy. Meanwhile, Republican Senator Jeff Flake is said to be introducing legislation to block the tariffs, part of what Politico calls a growing GOP effort to overrule the president on trade. A senior administration official says all countries impacted are “welcome to discuss” alternative ways to address the so-called national security concerns Trump is citing, implying nations can negotiate trade agreements with the U.S. to squash the tariffs.
Canada Staying Calm and Constructive Amidst Trade Talks
As President Donald Trump has ratcheted up the conversation on trade, Canada is sticking to it’s “keep-calm” strategy. While the European Union immediately offered a list of targeted U.S. products in response to Trump’s tariff plan for steel and aluminum, Reuters says Canada is trying to stay constructive, and use negotiations for a better outcome. For now, the tariff plan rolled out by Trump includes exemptions for Canada and Mexico, if the three nations agree to a fair North American Free Trade Agreement. The mood by Canada reflects comments by Canadian trade officials who earlier this week said threatening retaliations and striking back at the U.S. “just irritates” President Trump. Although, officials say Canada does have a list of products for retaliation against the steel and aluminum tariffs, if warranted. Another trade official from Canada says “its pointless” to talk publicly about retaliation measures “until you have to act.”
TPP Leaves U.S. Behind
The 11 remaining Trans-Pacific Partnership countries officially left the U.S. behind Thursday, signing an amended agreement that does not include the United States. The 11 nations signed what is now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership the same day the U.S. moved to a more trade protectionist status, rolling out tariffs for steel and aluminum imports. The new CPTPP will reduce tariffs in countries that together amount to more than 13 percent of the global economy, a total of $10 trillion in gross domestic product. With the United States, it would have represented 40 percent. Even without the United States, the deal will span a market of nearly 500 million people, making it one of the world’s largest trade agreements. The trade agreement would have been worth roughly $4 billion a year for U.S. agriculture.
Roberts: Senate Farm Bill Work Scheduled Next Month
Senate Agriculture Committee Chair Pat Roberts hopes to begin Senate farm bill work next month. This week, Roberts said that he wants to mark up the bill in April, adding that his staff and the staff of the committee’s ranking Democrat, Debbie Stabenow, have begun work on the bill. The key to the bill, Roberts told the Hagstrom Report, is coming up with language that has majority support so the committee can seek Senate floor time. Roberts said he would like to move the bill in March, but the omnibus appropriations bill and immigration will be priorities. He also said it is important to get the bill “right” before marking it up. Speaking on tariffs, Roberts said “I don’t like tariffs,” saying the farm bill and tariffs “are not a separate issue” because farmers need to export. Roberts says the benefits of the recent tax bill could be negated by the tariffs and a trade war, further harming U.S. farmers and ranchers at an already critical time.
USDA Report Indicates Increased Corn Demand
The Department of Agriculture has increased corn demand in it’s latest forecast for the 2017-18 crop year. The monthly World Agriculture Supply and Demand report increased exports of corn by 175 million bushels to 2.2 billion bushels based on price competitiveness, and increased expected corn ethanol use by 50 million bushels to 5.5 billion bushels. The average price for corn was increased five cents a bushel in the report to $3.35 a bushel. Meanwhile, the report shows a lower forecast for soybean exports, down 25 million bushels this month based on increased production and exports by Brazil. The price range for soybeans was increased, but the average expected price remains at $9.30 a bushel for the 2017-18 crop year. Further, U.S. wheat exports for the 2017-18 crop year were lowered 25 million bushels to 925 million bushels, while ending stocks were bumped up the same amount, ending at 1.034 billion bushels. The average wheat price for the 2017-18 crop was bumped up 5 cents to $4.65 a bushel.
Alltech President and Founder Dies
Alltech announced its founder and president, Dr. Pearse Lyons, died Thursday. The 73-year-old developed an acute lung condition during his recovery from heart surgery that led to his death. Alltech CEO Alric Blake said in the announcement Lyons was “a visionary entrepreneur who transformed the agriculture industry,” beginning with the application of yeast technology in animal nutrition. A leadership structure developed by Lyons names his son, Dr. Mark Pearse Lyons, as Chairman and President of Alltech. Lyons, described as an Irish entrepreneur and scientist, founded Alltech in a garage in 1980. The company has grown to include more than 5,000 employees worldwide and operates three divisions, including animal nutrition and health, crop science, and food and beverage. Funeral services are scheduled later this month in Lexington, Kentucky, and Dublin, Ireland, along with a celebration of life planned in May during ONE: The Alltech Ideas Conference, in Lexington.