U.S. farmers are harvesting crops for the second year in a row under the shadow of hefty tariffs, says agricultural lender CoBank, pointing to uncertainty over trade policy, late-maturing crops and African swine fever. “It is also increasingly unlikely that the United States-Mexico-Canada Agreement (USMCA) will come up for a vote in Congress before the 2020 election,” said CoBank in a quarterly review of the rural economy.
“No major labor unions support USMCA in its current form and both Democrats and Republicans are keen to win labor support in 2020,” said the Quarterly Rural Economic Review. “Given that significant change to labor provisions would require new ratification by all three countries, it appears unlikely that the deal will be put to a vote before 2021.”
CoBank vice president Dan Kowalski said global trade tensions “are ratcheting up as world economic growth slows.” The OECD projects world economic growth of 2.9 percent this year, down from 3.9 percent last year and the slowest growth since 2009.
There has been little progress in negotiations to resolve the China-U.S. trade war or for a new U.S.-E.U. free trade agreement, said CoBank. The bright spot in trade during the summer was Japan’s agreement to reduce or eliminate tariffs on $7.2 billion of U.S. agricultural products, putting most U.S. farm exports to Japan on the same tariff levels as members of the so-called TPP-11 nations.