It could change tomorrow, but at this moment nothing is getting done in this town. There are talks going on and ideas being evaluated. President Biden met with the Group of Seven in Europe and the NATO nations agreed to join together and challenge China’s behavior on trade, intellectual property, forced labor, and aggressive expansion. I’m not sure China will listen. Will they negotiate to lift all of the tariffs? China is the biggest customer for our ag products. If we alienate China enough, we might lose that market.
Another trade question that needs to be dealt with is TPA (Trade Promotion Authority). The U.S. was part of that agreement until President Trump withdrew. I always considered that a mistake. That agreement joined us with the Trans-Pacific Partnership to better compete with China. The agreement eliminated tariffs on 18,000 American made products. Now China wants to join TPA. We need to get back aboard.
U.S. Trade Representative, Katherine Tai met with German trade leaders to get rid of tariffs imposed by both countries in our dispute over Boeing versus Airbus, which has been going on for years. Reports are that they have reached an agreement. Also, we have the heavy metal steel and aluminum tariffs that Trump put on Germany.
Katherine Tai is highly respected, but she has a load on her shoulders. I almost forgot we are supposed to negotiate a free trade agreement with the UK also.
On the home front, the ag industry wants our government to deal with the concentration of our meatpacking industry. Cattle producers are not satisfied. The steak in the store costs a lot more, but what about the price of the market animal? USDA will be working to put in place stricter antitrust regulations. The Farm Bureau is worried that the EPA will give small refineries an exemption relieving them of their obligation to blend in ethanol. That will hurt the corn market.
As you can see, there are a lot of problems to be dealt with, but will we get anything done? Don’t bet the farm on it. Randy Russell will fill in for me next week.
John Block served as Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. John hosts a weekly radio show going back more than 20 years. The commentary and opinions shared are a summary of the discussion from the broadcast and not a reflection of the opinions of the firm at large. For more from John Block Reports from Washington visit www.johnblockreports.com.