President Trump was ambivalent about this week's trade talks with China, saying "I don't know if they're going to make a deal," even as China hinted at goodwill purchases of U.S. farm exports. Meanwhile, the White House said China, the second-largest economy in the world, ought to shed its status at the WTO as a developing nation and to play by the same rules as the United States and other industrial nations.
The WTO ruled in favor of the United States in its complaint that China had rigged its tariff system to constrict entry of foreign-grown grain. The ruling was the second U.S. victory in seven weeks against trade-distorting Chinese agricultural practices.
The Trump administration says its policy of confrontation with trading partners, such as the trade war with China and tariffs on steel and aluminum imports from Canada and Mexico, will lead to more advantageous relations for the United States. But Bill Reinsch, of the think tank Center for Strategic and International Relations, says the promise of "short-term pain, long-term gain" is unlikely to come true.
The Trump administration, with the weight of a WTO ruling behind it, called on China on Thursday to eliminate trade-distorting wheat and rice subsidies that cost U.S. farmers hundreds of millions of dollars a year in export sales. The WTO panel report may provide impetus to negotiations to resolve the Sino-U.S. trade war.
Agriculture amounts to a small part of NAFTA trade volume but it is a major sticking point for U.S. and Canadian negotiators who are scheduled to resume negotiations on the new NAFTA on Wednesday. The second-largest U.S. farm group said the White House ought to adopt the dairy supply management system that it reportedly is trying to eliminate in Canada and reinstate country-of-origin labeling on beef.
It is clear that India violates WTO limits on trade-distorting farm subsidies, said the Trump administration on Wednesday in announcing a “counter-notification” that could be the first step to a formal challenge of India’s wheat and rice subsidies.
Several states are considering country of origin labeling (COOL) proposals, which would require that beef products be labeled as imported or domestic products. The state proposals follow several years of attempts by rancher groups to revive federal law that would require country of origin labeling for beef.
Cotton growers are pushing for the second overhaul of USDA subsidies in four years and the results could be expensive to taxpayers and risk another trade complaint at the WTO, says the free-market American Enterprise Institute. Congress totally re-wrote the cotton program in the 2014 farm bill to resolve a WTO ruling, sought by Brazil, that over-generous U.S. subsidies distorted world trade.
The United States forced the creation of a WTO dispute panel to hear its complaint that China unfairly blocks imports of U.S. corn, wheat and rice, reported Reuters. When it filed the complaint last Dec. 15, the Obama administration said U.S. farmers lost as much as $3.5 billion in sales because China, the largest customer for U.S. ag exports, used so-called tariff-rate quotas (TRQs) to favor domestic producers.
In late 2015, looking to avoid a threatened $1 billion in retaliatory tariffs, Congress repealed a requirement that packages of beef and pork sold in the United States say where the animals were born, raised, and slaughtered. Now an activist ranchers’ group has filed suit to reinstate the labels.