China Stopping All U.S. Agriculture Imports
On Sunday, 8/4/2019, the Chinese government asked both state-owned enterprises, COFCO and Sinograin, to suspend the purchase of all U.S. agricultural goods.
Private soybean crushers and other non-state owned entities remain exempt from the import ban.
The directive from Beijing follows President Trump’s decision last week to increase the import tariff on $300 billion worth of Chinese goods effective September 1.
A major driver of President Trump’s decision to unexpectedly and hastily raise tariffs is a result of China’s purchasing U.S. farm goods at too slow of a pace.
The primary target seems to be U.S. soybeans, but pork and other commodities are included.
What It Means for the U.S. Farmer: At FBN, we believe that this decision is a negative for the U.S. farmer. China’s decision to retaliate and once again target U.S. agricultural producers does not come as a total surprise to FBN. Because China does not purchase U.S. corn; and imports wheat and pork in limited quantities, the U.S. soy producer should feel the brunt of this latest action.
EU Agrees to Increase U.S. Beef Imports
U.S. President Donald Trump announced on Friday an agreement to open up European markets to more U.S. beef exports.
EU sources and diplomats said a deal had been reached to allow the United States a guaranteed share of a 45,000 tonne European Union quota for hormone-free beef.
U.S. and European officials have been working to lay the framework for talks on a trade agreement but agriculture remains a sticking point for both countries.
The deal would not change the overall import volume and would also still need to be approved by the European parliament.
What It Means for the U.S. Farmer: At FBN we believe this recent development is a positive for the U.S. cattle producer. The deal does not include any modifications to the EU’s refusal to import non-hormone free beef from the U.S.
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