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With demand high, trade politics take backseat

With demand high, trade politics take backseat

A container ship docks

A container ship docks at the Wando Welch Terminal in Mount Pleasant, S.C.

The trade wars of the Trump administration may be in the rear view mirror, but trade remains an important issue no matter who is president. Right now, however, the Biden administration is more focused on domestic issues than on trade.

“There’s not a lot of activity right now (on formal trade negotiations),” says Joe Schuele, vice president of communications at the U.S. Meat Export Federation.

Generally speaking, agricultural trade has been booming, according to Dave Salmonsen, senior director for congressional relations at the American Farm Bureau Federation. Exports have been up in recent years.

China continues to buy U.S. agricultural products under the Phase I agreement and is at least close to the pace needed to reach the terms of the agreement. That commitment ends at the end of this year. China has also continued doing most of what it said it would do in regards to trade standards.

The difference is one of tone, Salmonsen says. Donald Trump campaigned on trade and protectionism and his administration started off with that on the front burner. The U.S. left the Trans Pacific Partnership discussion within days of his taking office.

President Joe Biden, like Barack Obama before him, took office during an emergency situation (COVID now, a financial crisis in 2009) and made it clear that domestic issues were the first priority.

But even now, there are plenty of things happening. It just means that the Biden administration is not actively engaged in formal talks regarding items such as the United States-Mexico-Canada (USMCA) agreement or other pacts.

When it comes to China, there are not any specific new developments in recent months. Schuele says U.S. beef is still at a competitive disadvantage to beef coming from Australia or New Zealand due to higher tariffs, but at the present demand is such that U.S. beef is still moving to China, so it has not been a major concern. Pork is still dealing with a 25% retaliatory tariff related to the U.S. steel and aluminum tariffs on China implemented by President Trump. Anything that could be done to solve that problem would be helpful, Schuele says.

BSE continues to complicate meat trade issues with several other nations, such as South Korea and Taiwan. Luckily, that isn’t an issue for most meat going to those nations and trade is moving so industry leaders are not very excited about bringing up the issue and potentially stirring up a hornet’s nest, Schuele says.

The USMCA is, generally speaking, working well, and trade continues to grow with Mexico and Canada, Salmonsen says. There is a dispute between the United States and Canada regarding dairy, and there are some concerns about Mexico wanting to phase out glyphosate by 2024.

“There are always ongoing issues,” Salmonsen says.

The Obama administration had opened negotiations with the European Union regarding some trade issues, but those weren’t really taken up by the Trump administration, Salmonsen says. There remain some barriers regarding GMOs and there is some concern about the EU’s strategy for climate issues in Europe and what that might eventually mean for trade.

There were some negotiations with the United Kingdom following BREXIT, but there are no direct talks happening at the moment.

South America and Africa are fledgling areas of trade negotiations, Salmonsen and Schuele say. Negotiations started during the last administration with Kenya, and if that were to lead to an agreement it would mark the first major trade agreement with a sub-Saharan African nation. But nothing appears imminent on that front.

The United States has free trade agreements with Chile, Peru and Columbia in South America, and most agricultural export organizations would welcome more FTAs with South American nations, but nothing appears imminent there.

One other issue that isn’t crucial at the moment but which will eventually need to be settled is trade promotion authority. TPA is generally necessary for the passage of large multi-national trade agreements because it allows the administration to forge an agreement and then Congress is required to approve it or deny it without amendments.

TPA expired on July 1, and the Biden administration has not requested an extension. That has happened in the past, and there may not be a push for TPA until there is an agreement on the table, Salmonsen and Schuele say.

CropWatch Weekly Update

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Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.

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