President Trump has threated the EU with tariffs in retaliation
By Diego Flammini
Agriculture may not be part of any upcoming trade discussions between the European Union and the United States.
Any trade agreement between the two partners will be “strictly focused on industrial goods, excluding agricultural products,” the EU said in a statement yesterday.
President Trump has threatened tariffs against key European products if American ag isn’t part of the negotiations.
“Look, if (the trade situation) doesn’t change, we’re going to tariff all of (the EU’s) cars and everything else that comes in,” the president said yesterday during a visit in Burnsville, Minn. “You can’t treat our farmers that way. You can’t treat our people that way.”
The U.S. represents a significant market for European cars. Auto exports from the EU to the U.S. totaled nearly US$43 billion in 2017.
American farm groups are upset with the EU’s decision, particularly considering trade discussions earlier in the year.
The 28-nation bloc announced in January that U.S. soybeans could be used in biofuel production.
Excluding agriculture from a future trade agreement is a step in the wrong direction, said Davie Stephens, president of the American Soybean Association.
“We had high hopes that some of the longstanding concerns regarding the EU’s policies on agricultural biotechnology and on revisiting the EU’s pesticide laws would be addressed,” he said in a statement Tuesday. “With the EU now formally excluding, it will be difficult if not impossible to address these non-tariff barriers that severely inhibit trade between our countries.”
U.S. politicians are also displeased that farmers will not be represented at the negotiating table.
Eliminating tariffs on industrial goods is a good starting point, but ag must be part of a deal if the EU expects the U.S. to pass it, said Chuck Grassley, a U.S Senator from Iowa.
“Any deal that eliminates tariffs will need to get congressional approval,” he said in a statement Monday. “Bipartisan members of the Senate and the House of Representatives have voiced their objections to a deal without agriculture, making it unlikely that any such deal would pass Congress.”
Farther east, China may be willing to remove tariffs from U.S. ag products.
Chinese officials are considering a U.S. application to shift tariffs from farm products onto other goods.
Coming to an agreement on ag tariffs could have significant implications politically in both countries, said Joe Sobczyk, an editor with Bloomberg News.
“There is some indication that the fact the Chinese are considering this suggests that there is some movement in the talks and they are negotiating on one of the key sticking points between the two countries,” he explained yesterday. “Agricultural products are politically sensitive for both countries. In the U.S., the farm industry is under stress from floods, traditional low margins and there’s a big constituency for the president going into 2020.
“In China, the price of things like soybeans and pork products are politically sensitive for the government there as well.”