With help from Catherine Boudreau, Liz Crampton and Sabrina Rodriguez
CHINA COMING AFTER U.S. FOOD & AG TARGETS: China announced Tuesday that it will fire back at President Donald Trump with retaliatory duties of 5 percent or 10 percent against another $60 billion worth of U.S. products, a day after Trump triggered the largest wave of tariffs yet in the escalating trade dispute.
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Once China implements the plan — scheduled for Monday, to coincide with the new U.S. duties — a total of $113 billion in U.S. exports will be subject to tariffs, while the U.S. will have placed taxes on a total of $253 billion in Chinese goods. And Trump is prepared to go further. On Tuesday, he reiterated his threat to impose duties on another $267 billion worth of imports, reports Pro Trade’s Doug Palmer. Trump accused China of purposefully targeting farmers, ranchers and industrial workers “because of their loyalty” to him.
“What China does not understand is that these people are great patriots and fully understand that… China has been taking advantage of the United States on Trade for many years,” Trump tweeted. “They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”
What’s on China’s list this time? Meat products including lamb, salted beef and pig casings and hind legs; frozen and canned produce like peas and spinach; refined ingredients ranging from soybean, corn and coconut oil to processed oats; along with coffee, teas and liquors.
POLITICO reached out to ADM and Bunge, two of the world’s largest food processing and commodity trading companies, for comment on the impact of this new round of tariffs. Bunge declined, while ADM referred inquiries to the U.S.-China Business Council, which argues the tariffs are counterproductive and will lead to further trade distortions that harm the U.S. economy. A spokeswoman for the American Frozen Food Institute said in an email that the organization is still in the process of surveying its food manufacturers to understand the likely effects.
Pushback from farm world: Some ag groups and officials were critical of Trump’s decision. “As we head into the 2018 harvest season for corn and soy out here in Iowa, this escalation of the trade conflict really couldn’t come at a worse time,” Iowa Agriculture Secretary Mike Naig said in an interview on CNBC.
The National Farmers Union also spoke out against the new round of tariffs.
“The administration’s current strategy has created serious and potentially irrevocable problems for American farmers and ranchers,” Rob Larew, NFU’s senior vice president of public policy and communications, said in a statement Tuesday — pegging losses for corn, soy and wheat growers in the month of June alone at roughly $13 billion. “Yesterday’s announcement to escalate tensions further will undoubtedly cost them billions more in the years to come.”
On the other side: California garlic company Christopher Ranch LLC said it’s all in on Trump’s trade war — especially the new 10 percent tariff on Chinese garlic imports.
“Illegally dumped Chinese garlic continues to flood the U.S. market, making its way to unassuming American consumers, and U.S. farmers need our government’s support,” Ken Christopher, the company’s executive vice president, said in a statement. “The anticipated tariffs of Chinese garlic will go a long way to restoring a longstanding injustice on American garlic farmers.”
HAPPY WEDNESDAY, SEPT. 19! Welcome to Morning Ag, where your host was sorry to read about the demise of this New Orleans cat who inadvertently caused a power outage for 7,500 people. Send your news and tips to email@example.com or @ryanmccrimmon. Follow the whole team @Morning_Ag.
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CONFEREES AIM TO FINISH AG SPENDING PACKAGE: There are just four combined legislative days remaining in September, but top appropriators aren’t giving up on finishing work on a four-bill minibus spending package that would include funds for USDA and FDA. A final version of the legislation, H.R. 6147 (115), is being negotiated by a House and Senate conference committee. Staff-level talks over the package continued Tuesday with House members out of town for a weeklong recess.
“Sounds like from everything I understand, with a modest level of cooperation, those bills could also be completed,” Sen. Jerry Moran (R-Kan.), a top appropriator who previously chaired the Agriculture-FDA Subcommittee, said on the floor.
What’s the holdup? One of the last outstanding issues in the Agriculture-FDA measure was disagreement between lawmakers and the Trump administration over a House provision that would give USDA’s Food Safety and Inspection Service regulatory jurisdiction over cell-based meat and poultry products, rather than FDA.
The agencies have been engaged in a turf war over which entity should regulate the nascent industry. House and Senate conferees on both sides support the language giving control to USDA, but the White House wants time and flexibility to work out the interagency dispute, according to people with knowledge of the discussions.
Current status: Aides involved in the talks have said a conference agreement could be reached by the end of September, but it remains to be seen whether a potential deal would come in time to clear the final legislation before Sept. 30.
Either way, there’s little chance of a shutdown at USDA or FDA. The Senate passed a separate spending package Tuesday that includes a continuing resolution for all agencies whose new appropriations aren’t approved on time, and the House is expected to clear it next week.
Sen. Pat Leahy, the top Democrat on the Appropriations Committee, also said conferees were “very close to an agreement,” and he stressed the urgency of passing new USDA funding.
“Look at the agriculture bill — critical support for our country’s farmers,” Leahy said on the floor. “Every state in this union has rural communities … and farm economies. They benefit from these programs. They shouldn’t have to operate under a CR.”
Pro Energy’s Anthony Adragna has more on senators holding out hope of completing the minibus package, which also includes the Interior-EPA bill.
TIME RUNNING OUT FOR 3-WAY NAFTA DEAL: With a self-imposed deadline looming, U.S. and Canadian officials are feeling the pressure to strike a trade deal — just as GOP lawmakers are hinting they’re open to a bilateral U.S.-Mexico pact that leaves Canada out in the cold. House Majority Whip Steve Scalise said “there is a growing frustration with many in Congress regarding Canada’s negotiating tactics,” in a statement first reported by POLITICO Playbook PM.
“Members are concerned that Canada does not seem to be ready or willing to make the concessions that are necessary for a fair and high-standard agreement,” Scalise (R-La.) said. “While we would all like to see Canada remain part of this three-country coalition, there is not an unlimited amount of time for it to be part of this new agreement.”
The warning shot came just before Canadian Foreign Minister Chrystia Freeland returned to Washington on Tuesday night to resume high-level talks with U.S. trade officials today, aiming to cut a deal that would add Canada into the preliminary U.S.-Mexico framework.
The timing is tight: The Trump administration notified Congress on Aug. 31 of its intent to sign a deal with Mexico — and possibly with Canada — to allow trade promotion law processes to be satisfied and still enable Mexican President Enrique Peña Nieto to sign the agreement before his last day in office on Nov. 30. Under the law, Trump must submit draft text to Congress 30 days after the notification — or Sept. 30 — and he cannot sign the deal until at least 60 days after that. And Mexican Economy Secretary Ildefonso Guajardo has said at least 10 days will be needed to finish the draft text, so Sept. 20 appears to be a target date for a deal with Canada, if not a deadline.
If there’s no deal by then: Trump has said he’s happy to move ahead with the bilateral U.S.-Mexico agreement reached in August. But many lawmakers and business groups have pushed back, arguing Canada needs to be included in any new trade pact that replaces NAFTA. Those groups include heavyweights like the U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable, as Pro Trade’s Doug Palmer writes.
On the other hand, Scalise’s statement Tuesday suggests there could be more support than anticipated — at least among House Republicans — for a two-way deal.
— Belgian pork banned over swine fever fears: Six countries have banned pork imports from Belgium after the European nation discovered the highly contagious African swine fever in two dead boars last week. The six nations, which include China, South Korea and Mexico, represent about 50 percent of Belgium’s total pork exports. POLITICO Europe’s Simon Marks has the details.
— The latest on N.C. hog-waste lagoons and Florence: More than two dozen lagoons containing hog waste have been damaged or overtopped by floodwaters, according to the most recent assessment from the state’s Department of Environmental Quality, WRAL reports. Four lagoons have been damaged and two of those “breached.” Thirty lagoons were inundated by water. State officials continue to monitor the potential damage, which environmental groups warn could have lasting negative effects on local waterways.
— USDA to spend $103 million on specialty crop marketing: The department will give $72 million to state agriculture departments to help growers of fruits, vegetables and nuts expand markets for their products, USDA said Tuesday. The rest will go to direct producer-to-consumer programs like farmers markets and agri-tourism, along with other marketing and research efforts.
— Senate panel advances nominee for ag ambassador to U.N.: The Senate Foreign Relations Committee on Tuesday advanced Kip Tom’s nomination to become U.S. representative to the United Nations Agencies for Food and Agriculture, based in Rome. Before Trump’s inauguration, Tom had been rumored to be under consideration for USDA secretary. POLITICO’s Sarah Zimmerman has the story.
— EPA IG to retire in October: The Inspector General who launched half a dozen investigations into former EPA Administrator Scott Pruitt’s management and ethics scandals will leave the agency Oct. 12, his office announced Tuesday. Arthur Elkins Jr. is currently overseeing probes into large salary raises for Pruitt’s close aides and his $50-a-night condo rental, as Pro Energy’s Alex Guillén explains here.
— DowDuPont names CEO for ag spin-off Corteva: James Collins Jr., the COO of DowDuPont’s agriculture division, will become chief executive when the division becomes independent agribusiness Corteva Agriscience, the company announced Tuesday. Corteva is expected to become a separate, publicly traded company by June 2019.
— ERS relocation pushback continues: The National Farmers Union joined the long list of lawmakers and ag groups concerned about USDA’s plans to move the Economic Research Service and National Institute of Food and Agriculture out of Washington, D.C. In a letter to Secretary Sonny Perdue, NFU President Roger Johnson said the group was “deeply concerned that the relocation and reorganization could jeopardize each agency’s objectivity.”
— Who’s using cage-free eggs? The group Compassion in World Farming released an updated report tracking food companies shifting toward use of cage-free eggs. Among the group’s findings: Taco Bell “fulfilled their commitment to source 100 percent cage-free eggs as ingredients in all deserts and mayo-based sauces.” Other companies that received a 100 percent cage-free rating include Papa John’s Pizza, Shake Shack and Whole Foods.
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