READ the NAFB’s National Ag News for Friday, March 23rd

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READ the NAFB’s National Ag News for Friday, March 23rd

Trump: China Tariffs Will Total $50 Billion

President Donald Trump announced an estimated $50 billion in tariffs against Chinese imports today. Bloomberg says it’s a retaliatory move against intellectual property violations. The move will take effect on more than 100 different types of Chinese products. The overall value of the tariffs was based on economic estimates of the damage caused by those intellectual property violations. Last year, Bloomberg says Trump instructed U.S. Trade Representative Robert Lighthizer to look into claims that China steals U.S. intellectual property and forces American companies to transfer their technical know-how to Chinese firms as a condition for doing business in the country. Lighthizer confirmed in testimony before the House Ways and Means Committee on Wednesday that the administration is considering both tariffs and curbs on Chinese investment. U.S. companies like Walmart and Amazon have warned the White House that tariffs on Chinese goods will hit consumers with higher prices. The Wall Street Journal says China plans on hitting back against Trump tariffs by targeting goods from states and industries that tend to employ Trump supporters. Ways and Means Chair Kevin Brady cautioned Lighthizer and the administration about “indiscriminate” tariffs against China, noting that “it’s not about backing down, it’s about hitting the target.”

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More Tariff Exemptions for U.S. Trading Partners

During testimony before the Senate Finance Committee, U.S. Trade Representative Robert Lighthizer confirmed that the European Union, Australia, Argentina, Brazil, and South Korea will be exempted from tariffs on steel and aluminum. A Politico report says Lighthizer told the committee that, “the president has decided to pause the imposition of the tariffs with respect to those countries.” The levies are set to take effect on Friday. Canada and Mexico had already been exempted from the tariffs. The president agreed that “based on a certain set of criteria, that some countries should get out” and those are the countries that the U.S. has been negotiating with. Lighthizer confirmed the exemptions after ranking member Ron Wyden asked the administration’s trade boss to provide some clarity on the exemption process. “Everyone here wants to be part of the consultation process, which we haven’t had much of, recently,” Wyden said. “Which countries – because it’s going to happen tomorrow – won’t have these steel and aluminum tariffs applied to them?” Lighthizer responded with, “It’s the list I just gave.” The U.S. Trade Representative and the U.S. Commerce Department have been in talks with several countries about exempting them from the steel and aluminum tariffs.

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Appropriations Bill Agreed Upon by Congress, Contains Section 199A “Fix”

The Hagstrom Report says congressional leaders have agreed on an omnibus appropriations bill to fund the government through September 30. It passed a House vote today, 256-167, and is expected to pass in the Senate before the weekend. There may still need to be a short-term continuing resolution if any senators object to the bill. The bill does contain a fix to Section 199A of the tax law that currently gives farmers an incentive to sell to cooperatives rather than privately owned companies. The National Grain and Feed Association was happy with what they saw. NGFA President and CEO Randy Gordon says there is a huge sense of urgency in getting this issue fixed as producers continue to make marketing decisions, especially with the recent rally in corn and soybean prices. Ag Secretary Sonny Perdue says the spending plan contains a number of USDA priorities. “Fixing the so-called ‘grain glitch’ problem is simply an issue of fairness and we should not be picking winners and losers through the federal tax code by favoring one side over another,” Perdue says.

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Omnibus Spending Bill Also Contains Livestock “Fixes”

The U.S. Cattlemen’s Association was pleased to see that the omnibus appropriations spending bill released on Wednesday night has what it called “two commonsense solutions to regulatory overreach in the Fiscal Year 2018.” The spending bill includes a one-year delay of the Electronic Logging Devices mandate for livestock haulers. It also excludes livestock producers from the reporting requirements of the Environmental Protection Agency’s livestock emissions reporting mandate. Executive Vice President, Kelly Fogarty, says both of the victories in the bill offer commonsense solutions to over-regulation. “The USCA Transportation Committee will use the one-year delay to continue its work with the Federal Motor Carrier Safety Administration and Congress to secure needed flexibility for livestock haulers in the restrictive Hours-of-Service rules,” says Fogarty. “USCA worked hard to avoid yet another EPA overreach on the industry and we will continue to work with the administration and Congress to secure successful outcomes on both of these issues.” USCA says they thank members of Congress for acknowledging and addressing regulatory overreach and its potential negative impact on the livestock industry.

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Farmers for Free Trade: Tariffs Make American Farmers a Target

Brian Kuehl, Executive Director of Farmers for Free Trade, says the Section 301 tariff announcement against China is bad news for American agriculture. The group says these tariffs will put a target on the backs of American farmers. Kuehl says, “In fact, in testimony this week, U.S. Trade Representative Robert Lighthizer says that ‘farmers get the short end of the stick’ when we raise tariffs like these on other countries. Given that China is the second-largest export market for American farmers and ranchers, the pain from retaliation could be significant.” The group points out that state-run Chinese media has already indicated that American soy exports could be targeted. That would mean the nearly $14 billion in annual soy exports from American farmers could face an immediate tax. Other reports from China have said that American pork and sorghum exports could also be in the bullseye. “Nobody wins in a trade war,” Kuehl adds, “but it’s also true that some sectors of the economy lose more than others. Over the years, American agriculture has consistently paid the price for protectionism.” With farm incomes declining, the last thing American farmers and rural communities can afford is a tax on the export market they rely on.

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NBB Disappointed with No New Biodiesel Tax Credit

The omnibus appropriations bill that’s already won approval in the House of Representatives doesn’t reinstitute the biodiesel tax credit. Kurt Kovarik, National Biodiesel Board VP of Federal Affairs, says his organization is disappointed that Congress once again hasn’t provided pro-growth tax certainty for a domestic energy industry that has broad bipartisan support. “The lack of urgency by Congress to extend this expired tax credit continues to frustrate the producers, blenders, and marketers of biodiesel,” says Kovarik, “and we will work to educate members of the economic and environmental benefits of increased use of biodiesel, so that Congress is poised to drive investments in this American energy industry. “Last February, Congress passed a retroactive biodiesel tax credit that applied to 2017 only. Producers continue to operate in 2018 without a tax credit, which is forcing biodiesel producers nationwide to carry the risk of the uncertainty caused by the lack of the tax credit. For some small biodiesel producers, that can be the difference between keeping the lights on or shuttering down. 

SOURCE: NAFB News Service

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