TRADE UPDATE

Food & Agriculture
Jan. 21, 2025

By Kristy Goodfellow, Vice President of Trade and Industry Affairs and CRA Trade Intern, Sophia Vaccaro

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HIGHLIGHTS

  • Inauguration: President Donald Trump used his inaugural address to discuss his plans to use tariffs as a cornerstone of his administration’s trade policy and express his frustration over the treatment of American ships at the Panama Canal.
  • Trump Administration:
    • During Florida Republican Marco Rubio’s Senate confirmation hearing for the role of Secretary of State, he criticized free trade and acknowledged agriculture irritants in the relationship with Mexico.
    • President Trump nominated Luke Lindberg to be the next USDA Under Secretary for Trade and Foreign Agricultural Affairs (TFAA).
  • US-China: USTR released the “2024 Report to Congress on China’s WTO Compliance,” which highlights China’s non-compliance with numerous trade commitments, including many food and agriculture provisions.
  • US-Colombia: The United States and Colombia announced an agreement interpreting provisions of the Trade Promotion Agreement investment chapter, despite concerns raised by Congress and U.S. industry.
  • International Organization: The Food and Agriculture Organization of the United Nations (FAO) produced a joint report that tracks 50 food systems across the world. The report is the first comprehensive analysis of food systems indicators since 2000.

“I will immediately begin the overhaul of our trade system to protect American workers and families. Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.”

—– President Donald Trump during his Jan. 20, 2025, inaugural address in the U.S. Capitol rotunda

Inauguration

TRUMP PLEDGES TARIFF ACTION IN FIRST ADDRESS AS PRESIDENT

  • President Donald Trump used his first remarks as the newly inaugurated President of the United States to discuss his plans to levy tariffs on foreign goods entering the United States as well as express his frustration with the treatment of American-flagged ships in the Panama Canal.
  • Trump said he plans to “tariff and tax foreign countries to enrich our citizens” rather than tax Americans “to enrich other countries.” He also discussed his plans to establish the External Revenue Service “to collect all tariffs, duties, and revenues,” stating that “massive amounts of money” will be pouring into the Treasury Department from “foreign sources.”
  • Trump’s desire to reclaim American ownership of the Panama Canal was also a fixture of his remarks, saying the canal had been “foolishly given to the country of Panama after the United States … spent more money than ever spent on a project before,” including the loss of 38,000 lives during the construction process. Trump said American ships have been “severely overcharged” for passage through the canal, and “we’re taking it back,” though he did not express the mechanism for doing so.

Trump Administration

MARCO RUBIO’S SENATE CONFIRMATION HEARING HELD

  • Florida Republican Marco Rubio’s Senate confirmation hearing was held on Jan. 15. Rubio, who has been in the Senate since 2011, is Trump’s nominee for Secretary of State.
  • In his testimony before the Senate Foreign Relations Committee, Rubio said that “free and unfettered trade” has “shrunk the middle class, left the working class in crisis, collapsed industrial capacity, and pushed critical supply chains into the hands of adversaries and rivals.”
  • Rubio mentioned his discontent with the current state of the U.S.-Mexico trade relationship, saying that what he’s seen in the agricultural sector will continue to be an “irritant” in the relationship.
  • Rubio also discussed China, saying that the country has used global orders to its advantage and at the expense of the United States.
  • Additionally, Rubio emphasized his desire to put U.S. national interests first and above all.

USDA TRADE AND FOREIGN AGRICULTURAL AFFAIRS

USDA Trade Under Secretary Nominee Luke Lindberg (Photo: South Dakota Trade)
  • As part of a handful of recent announcements for USDA posts, Trump nominated Luke Lindberg to be the next USDA Under Secretary for Trade and Foreign Agricultural Affairs (TFAA).
  • In this position, Lindberg would oversee the Foreign Agricultural Service (FAS), which leads the promotion of U.S. agricultural exports, and the U.S. Codex Office. 
  • Lindberg is currently the President & CEO of South Dakota Trade and was Chief of Staff at the Export-Import Bank.
  • FAS published 2024 highlights, including the USMCA biotech corn dispute, market access for certain commonly named U.S. meats and cheeses in Chile, and opening the South African market for genetically engineered corn.
  • Outgoing USDA TFAA Under Secretary, Alexis Taylor, has accepted a position with the International Fresh Produce Association as Chief Global Policy Officer.

US-China

USTR RELEASED ANNUAL REPORT ON CHINA’S WTO COMPLIANCE

  • The Office of the U.S. Trade Representative (USTR) released the “2024 Report to Congress on China’s WTO Compliance,” which is an assessment of China’s membership in the World Trade Organization (WTO).
  • The report notes China is still significantly increasing the value of domestic subsidies and other support measures for its agricultural sector.
  • Throughout the report, USTR highlights China’s non-compliance with trade commitments, including food and agriculture provisions. For example, the report notes tariff-rate quotas for the agricultural sector have yet to be fully realized, commitments concerning agricultural biotechnology under the Phase One Agreement remain unfulfilled, and the Chinese government continues to limit foreign participation in standards settings.
  • The report also highlights numerous product-specific sanitary and phytosanitary problems.
  • The report states that the most systemic shortcomings in China’s antidumping and countervailing duty practice continue to be in areas of transparency and due process. 

US-Colombia

INVESTOR STATE DISPUTE SETTLEMENT

  • The United States and Colombia announced an agreement interpreting provisions of the Trade Promotion Agreement investment chapter.
  • In the announcement, former USTR Katherine Tai stated, “Like President Biden, I oppose the ability of private corporations to attach labor, health, and environmental policies through ISDS.”
  • The USTR press release states “these interpretations have all been previously expressed in the USMCA, the KORUS, and U.S. filings in ISDA arbitration.”
  • Concerns about USTR’s process and positions were raised by representatives of the Senate and the House, including a Jan. 10 letter led by Rep. Adrian Smith (R-NE) and signed by 11 House Ways and Means Republicans, and a Jan. 14 letter signed by 18 Senators, including both Republican and Democratic leaders of the Committee on Finance.
  • Several industry groups including the Chamber of Commerce, National Association of Manufacturers, and some U.S. food and agriculture associations have also expressed concerns about USTR’s process and positions.

International Organization

  • The Food and Agriculture Organization of the United Nations (FAO) produced a joint report with Columbia University, Cornell University, and the Global Alliance for Improved Nutrition (GAIN) that tracks 50 food systems across the world. The report is the first comprehensive analysis of food systems indicators since 2000.
  • The indicators are organized into five themes: 1) diets, nutrition, and health; 2) environment, natural resources, and production; 3) livelihoods, poverty, and equity; 4) resilience; and 5) governance.
  • While the report found encouraging progress in resilience and nutrition, with significant increases in access to safe water and availability of vegetables, it also found increased food price volatility, a decline in government accountability, and decreased civil society participation.
  • The report “provides a clear roadmap for evidence-based policymaking,” identifying governance and resilience as pivotal leverage points for food system transformation.