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China pledges to fire back on ag goods for U.S. tariffs


WASHINGTON, D.C. — Within the next few weeks farmers and food producers will know the full extent of the retaliatory tariff measures China has threatened to impose on the United States.

These include $3 billion on imports of pork, soybeans, fruits and more than 100 other American goods, following the Trump administration’s declaration to levy $60 billion in tariffs on Chinese imports, and limit other moves by the Beijing government.

In addition, President Donald Trump pledged to limit China’s desire to invest in U.S. technologies, citing practices of hijacking U.S. trade secrets including the 2013 theft of proprietary seeds dug up by Chinese spies on Iowa cornfields operated by Monsanto and DuPont. And just over a year ago, a top Chinese crop scientist was convicted in federal court for engineering a multimillion-dollar scheme to steal genetically modified (GMO) rice seeds from laboratories in Iowa, Missouri and Ohio.

China’s tariff announcement on the eve of March 23 followed within hours of the White House’s decision to impose tens of billions of dollars on Chinese goods, including restrictions on technology transfers and acquisitions, to force the Chinese government to change what the administration terms unfair trade and investment practices.

Trump made the announcement when he signed a presidential memorandum that cites Section 301 of a 1974 U.S. trade law that gives the president the authority to take unilateral actions against those countries that impose unfair trade policies against the United States.

“We’re doing things for this country that should have been done for many, many years,” he said.

U.S. Trade Representative Robert E Lighthizer was directed to propose tariff increases in 15 days, about April 8, designed to compensate the U.S. for lost profits and jobs. The White House said it is putting together a package of 25 percent tariffs on Chinese imports, targeting approximately 1,300 product categories.

The President said the measures could affect “about $60 billion,” but advisers say it’s more likely $50 billion, or roughly 10 percent of the more than $500 billion the U.S. imported in goods from China last year. After a 30-day comment period, the Office of Trade Representative will publish a list of tariffs targeting those Chinese goods that benefited from U.S. technology, officials said.

On the White House imposing investment restrictions, officials said the Treasury Department will have 60 days to present to the Committee on Foreign Investments in the U.S. (CFIUS) proposals to screen and limit Chinese companies wanting to invest in the United States.

CFIUS is an interagency of the government that reviews the national security implications of foreign investments in U.S. companies and operations. “The harm done by theft of our technological seed corn is almost incalculable,” said a senior White House official talking to reporters (not identified, under the ground rules for such White House briefings).

The stealing of DuPont’s and Monsanto’s GMO corn technology culminated in 2016 following a five-year undercover FBI investigation with the conviction of a Chinese-American crop scientist and the indictments of five other Chinese corn crop experts who fled to China before they could be arrested.

In the Chinese government’s announcement last week, the Commerce Ministry said it has compiled a list of reciprocal tariffs on 128 U.S. products that include pork, wine, fruit and steel. The government said it would impose a 15 percent tariff if the two countries can’t resolve their differences “within a stipulated time.”

In a Beijing statement the ministry said the penalties are being imposed in response to Trump’s recent tariffs on steel and aluminum products, which the ministry said violates global trade rules.

“China does not want to fight a trade war, but it is absolutely not afraid of a trade war,” the government statement said Friday morning.

“If the trade situation continues to deteriorate, our lives as farmers and ranchers will become more difficult,” American Farm Bureau Federation President Zippy Duvall said. “America’s farmers and ranchers export more than $21 billion of farm products to China – more than 20 percent of their production. After Canada, China is our second-largest customer for ag products.

“Our farmers and ranchers depend on trade for a living, and we are very concerned about retaliation resulting from the tariffs. China is an important market for U.S. pork, with about a billion dollars’ worth going to China and Hong Kong, our biggest market. This will really hurt U.S. pork producers.”

U.S. soybean leaders also fear possible Chinese tariffs. Iowa Soybean Assoc. (ISA) President Bill Shipley said, “No winners emerge from a trade war, and that’s particularly true when it involves food and nutrition. It’s very clear from our conversations this week in China that our most important customer of U.S. soybeans doesn’t desire a trade war. The people just want to do business.

“So, too, do Iowa and U.S. farmers,” Shipley added in a statement to Farm World, “particularly as we prepare to go to the fields and plant what could be a record number of acres.” Iowa is consistently one of the top two states in soybean production.

China imports nearly $14 billion in U.S. soybeans. “A trade war with China involving soybeans would be devastating,” said ISA CEO Kirk Leeds.

Trump’s move to impose the tariffs follows his campaign promise to take action against China for what he has called “unfair” trade practices that has cost thousands of U.S. jobs and added billions to the trade deficit.

In rare agreement with the President, Senate Minority Leader Chuck Schumer (D-N.Y.) said, “I don’t agree with President Trump on a whole lot, but today I want to give him a pat on the back. He is doing the right thing when it comes to China.”

Prior to Trump announcing he was exempting the European Union from tariffs on steel and aluminum that he proposed, Rep. Ron Kind (D-Wis.) said he had asked USDA Secretary Sonny Perdue to protect Wisconsin dairy and cranberry farmers from any retaliatory tariffs that could have been imposed on U.S. by the EU. Wisconsin cranberries are the top export fruit to the EU, he said.

3/28/2018