Impact of COVID-19 on Agriculture

More Tariffs on the Chinese Horizon

Market Intel / May 9, 2019

Credit: Sgt. Mikki Sprenkle/Public Domain 

At 12:01 tomorrow (Friday, May 10) morning, the United States is expected to increase tariffs from 10% to 25% on $200 billion worth of Chinese products. The increase in these particular tariffs were delayed twice since the investigation determination was published in the Federal Register on Sept. 21, 2018. The rate of additional duties in effect since Sept. 24, 2018, was 10%.

Under Annex B of the Sept. 21 notice, the rate of additional duty was set to increase to 25%on Jan. 1, but on Dec. 19, the U.S. Trade Representative published a new directive in the Federal Register, postponing the increase in the rate of the additional duty to 25% until March 2. After considerable negotiation between the United States and China, on Feb. 24, the president directed the USTR to again postpone the increase in tariffs. The bump from 10% to 25% on May 10 ends the speculation as to when/if the increase in tariffs would occur.

When the United States initially applied the additional 10% tariff on Chinese goods in September 2018, China retaliated with tariffs of 5% and 10% on a wide variety of U.S. goods, including a number of agricultural products. While China has vowed to retaliate further once the increase from 10% to 25% goes into effect, they have not publicly released a list of products that would be subject to additional retaliation. There are three possibilities: China could simply increase the tariffs from its September retaliation list, increase tariffs on a new set of products or they could choose yet another means of retaliation. Unfortunately, only time will tell.

In the meantime, we have updated the tariff schedule of U.S. food and agricultural products subject to China’s response to the U.S. 232 and 301 Investigations. The cells that are highlighted in pink are the retaliatory tariffs that resulted from the initial 10% tariff applied by the United States in September 2018.

Contact:
Veronica Nigh
Economist
(202) 406-3622
veronican@fb.org
 

Share This Article

Credit: Pixabay 

First incorporated into a farm bill in 1985, the conservation title is what some would consider the original Green New Deal. Its voluntary conservation initiatives give farmers and ranchers flexibility to adopt practices in a market-based approach. Farmers and ranchers are already good stewards of water and land, but the 2018 farm bill, the Agriculture Improvement Act of 2018, provided expanded conservation programs that could increase conservation initiatives. The goal is to improve water quality and wildlife habitats and populations, protecting natural resources and providing many other benefits. The conservation title of the 2018 farm bill spends $60 billion of the $867 billion of mandatory funding required for conservation programs over 10 years, equal to 7% of the bill’s total projected mandatory spending in that timeframe.

Full Article
Credit: iStockPhoto 

AFBF’s Market Intel is publishing a five-part series to highlight the opportunities, challenges, policy levers and overall operation of agriculture ecosystem credit markets. This Market Intel article, the last in the series, looks at the development of good business practices for agriculture ecosystem credit markets and assesses the markets’ long-term impacts.

Full Article