Looking at Canada and Mexico, but seeing China
U.S. agriculture won modest gains in the new NAFTA, to be known as USMCA, while preserving duty-free access for exports to Canada and Mexico. Taking a broader perspective, Agriculture Secretary Sonny Perdue sees the agreement as the harbinger of a better deal for farm trade with China. “The dominoes are falling, and it is good news for U.S. farmers.”
Like other administration officials, Perdue says the United StatesMexico-Canada Agreement, announced last month and headed for a vote in Congress next year, is validation of President Trump’s strategy of bulldozing trade partners with tariffs and threats of other sanctions in order to win concessions. Trump threatened additional tariffs on Chinese imports on the same day that he backed year-round sales of E15.
With retaliatory tariffs against U.S. ag goods in place in China, Canada, Mexico, and the EU, Perdue says USDA is looking for alternative markets for farm exports. At a trade group meeting, he likened the approach to playing “small ball” baseball to score rather than relying on the home run. Perhaps, he says, it was a mistake in becoming so dependent on China as a customer. During a celebratory announcement of USMCA, President Trump said steel and aluminum tariffs on Canada and Mexico were a separate issue from the trade pact. Farm groups quietly urge removal of tariffs. The Pork Producers Council says hog farmers “demonstrated incredible perseverance as the administration realigns U.S. global trade policy.”
The administration says USMCA will enable fairer ag trade but did not immediately say how much it would be worth. Dairy officials say Canada would remain largely a protected market. Canada agreed to grade U.S. wheat equitably instead of automatically designating it as feed quality. “Farmers should understand that nothing has changed yet,” say the Wheat Growers and U.S. Wheat Associates. Ratification and implementation of USMCA is likely to take months.