TRADE UPDATE

Food & Agriculture
Nov. 26, 2024

By Kristy Goodfellow, Vice President of Trade and Industry Affairs and Ameya Khanapurkar, Trade Intern

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HIGHLIGHTS

  • Trump Administration: President-elect Donald Trump announced Howard Lutnick as his pick for the Secretary of Commerce and Brooke Rollins as his pick for the Secretary of Agriculture.
  • US-China:
    • For the first time, the U.S.–China Economic and Security Review Commission (USCC) unanimously called for Congress to repeal China’s Permanent Normal Trade Relations (PNTR) status in its 2024 annual report.
    • China’s Ministry of Finance declared that Chinese used cooking oil (UCO) exporters will no longer be eligible for a 13% tax rebate as of December 1.
    • The United States will ban imports from 24 Chinese producers of agricultural products due to forced labor practices.
  • COP29:
    • Secretary of Agriculture Tom Vilsack participated in the “Food, Agriculture, and Water” day at COP29, highlighting investments to position U.S. agriculture and forestry as climate leaders, develop climate solutions, and build climate-smart markets to provide revenue streams for rural communities.
    • The United Nations Food and Agriculture Organization (FAO), in partnership with the Azerbaijan COP29 Presidency, launched a new platform called the Baku Harmoniya Climate Initiative for Farmers.
  • US Congress: Democratic members of the Ways & Means Committee introduced legislation to stop the president from imposing national emergency tariffs without Congressional approval.
  • WTO: Negotiations on Fisheries Subsidies continued last week as WTO members attempted to fulfill their 12th Ministerial Conference (MC12) commitment to expand the subsidy rules that were adopted during MC12.
  • US-Mexico: The U.S. International Trade Commission (USITC) gave notice that it will review whether terminating the investigation on fresh tomatoes from Mexico would lead to a continuation of material injury as part of the required five-year review.
  • Trade Promotion: USDA’s Foreign Agriculture Service (FAS) is accepting applications to participate in a trade mission to Guatemala City, Guatemala, from March 3-7.

“The American people have clearly and consistently said that costs are one of their top concerns. Imposing sweeping tariffs on imported goods would raise prices on consumer products by thousands of dollars a year according to estimates. Not only would widespread tariffs drive up costs at home and likely send our economy into recession, but they would damage our trade relationships with allies and likely lead to significant retaliation, hurting American workers, farmers, and businesses … The law was never intended to be abused in this way. This legislation would enable Congress to limit this sweeping emergency authority and put in place the necessary Congressional oversight before any president – Democrat or Republican – could indiscriminately raise costs on the American people through tariffs.”

———–Rep. Suzan DelBene (D-WA)

Trump Administration

TRADE AND AGRICULTURE

  • On Nov. 19, President-elect Donald Trump announced Howard Lutnick as his pick to be the next Secretary of Commerce. Lutnick is the chairman and CEO of the investment firm Cantor Fitzgerald.
  • Trump’s press release stated Lutnick would oversee the United States Trade Representative, even though USTR reports directly to the President and has different oversight committees in Congress.
  • On Nov. 23, Trump announced Brooke Rollins as his pick for the Secretary of Agriculture position. Rollins has been the president and CEO of the America First Policy Institute since 2021 and directed the White House Domestic Policy Council during the Trump administration.

China

US COMMISSION CALLS FOR REPEALING CHINA’S PNTR STATUS

  • The U.S.–China Economic and Security Review Commission (USCC), which was established to offer Congress an annual report on the national security implications of the bilateral and trade and economic relationship, unanimously called for repealing China’s Permanent Normal Trade Relations (PNTR) status for the first time in its 2024 annual report.
  • PNTR revocation was one of USCC’s 32 recommendations addressing industrial policy, import and export controls, intelligence capabilities, technology transfer, and trade policy.
  • The report also recommended that Congress:
    • Consider legislation to require prior approval and ongoing oversight of Chinese involvement in biotechnology companies engaged in operations in the United States;
    • Improve the U.S. intelligence community’s ability to monitor China’s food and energy stockpiling that may signal a potential preparation for conflict;
    • Establish and fund an effort to develop and deploy Artificial General Intelligence capabilities;
    • Eliminate the $800 de minimis exception;
    • Eliminate federal tax expenditures for investments in Chinese companies; and
    • Restrict imports of certain technologies from China.
  • The report outlined many aspects of U.S.–China power competition, including research in emerging “choke point” technologies such as biotechnologies that the United States relies on. 
    • Regarding biotechnology, the USCC found that “China aims to use biotechnologies to make itself less dependent on U.S. agriculture while embedding Chinese firms in U.S. food production and supply chains in genomic, pharmaceuticals and other biotechnologies.”

BEIJING ENDS EXPORT TAX REBATE FOR USED COOKING OIL

  • China’s Ministry of Finance declared Chinese used cooking oil (UCO) exporters will no longer be eligible for a tax rebate on a 13% export duty as of December 1.
  • This announcement included the elimination of tax rebates on a range of products including aluminum; copper; and chemically modified animal, plant, or microbial oils and fats.
  • USDA recently published a report on U.S. renewable diesel production and growth and the impact on global feedstock trade. Within the report, USDA noted UCO imports tripled in 2023, driven by imports from China.
  • In Aug. 2024, the EU began imposing 36.5% antidumping duties on biofuels from China.

FORCED LABOR PREVENTION ACT ENTITY LIST

  • The Department of Homeland Security announced that the Forced Labor Enforcement Task Force is adding 29 Chinese entities to the Uyghur Forced Labor Prevention Act (UFLP) Entity List.
    • Twenty-four of these entities are producers of agricultural products, including tomato paste and products, walnuts, red dates, raisins, and other products.
  • As a result, U.S. Customs and Border Protection will prohibit imports from these companies because of the companies’ activities, either sourcing materials from the Xinjiang Uyghur Autonomous Region (XUAR) or working with the government of Xinjiang to recruit, transport, transfer, harbor, or receive Uyghurs or other persecuted groups out of the XUAR.
  • The UFLP was implemented in 2021, and it directs the Forced Labor Enforcement Task Force to prohibit imported goods manufactured with forced labor in China.

UNITED NATIONS CLIMATE ACTION CONFERENCE — COP29

USDA AT COP29

  • Secretary of Agriculture Tom Vilsack participated in the “Food, Agriculture, and Water” day at COP29, highlighting investments to position U.S. agriculture and forestry as climate leaders, develop climate solutions, and build climate-smart markets to provide revenue streams for rural communities.
  • Vilsack showcased recent USDA investments under the Inflation Reduction Act, including:
    • Conservation assistance;
    • Support for farmers and rural small businesses in developing clean energy and energy-efficient systems;
    • Grants and loans to support the transformation of rural electric cooperatives to clean energy;
    • Reducing the wildfire risk across communities, power lines, and watersheds; and
    • Support for urban and community forestry programs.
  • Vilsack highlighted USDA investment through the Partnerships for Climate-Smart Commodities and emphasized USDA’s global leadership in climate-smart agriculture through the AIM for Climate program and its International Climate Hub.
  • An op-ed by leadership at CGIAR and FAO emphasized the agrifood sector’s role in achieving a “just transition” to sustainable agricultural practices.
Source: x.com (@SecVilsack)

UN FAO – COP29 PARTNERSHIP

  • The United Nations Food and Agriculture Organization (FAO), in partnership with the Azerbaijan COP29 Presidency, launched a new platform called the Baku Harmoniya Climate Initiative for Farmers.
    • FAO will host the initiative as part of the Food and Agriculture for Sustainable Transformation (FAST) Partnership, which works to strengthen the quantity and quality of climate finance in agrifood systems for the most vulnerable.
    • The initiative will catalyze investments in agrifood systems in public and private sectors, building on collaborations with Multilateral Development Banks and Agricultural Public Development Banks.
    • A key aim is to enhance climate policies by creating an enabling environment for implementation.

US Congress

LEGISLATION TO CONTEST TARIFFS

  • Reps. Suzan DelBene (D-WA) and Don Beyer (D-VA) lead a group of 10 House Ways & Means Committee Democrats in introducing legislation to stop the president from imposing national emergency tariffs without Congressional approval.
  • This legislation comes in response to President-elect Donald Trump’s campaign promise of imposing sweeping tariffs of 10-20% on all imported goods into the U.S.
  • The president has broad authority to declare emergencies in response to national security or economic threats under the International Emergency Economic Powers Act (IEEPA). In a release, DelBene’s office argues that the law “was never meant to allow a president to indiscriminately impose tariffs without Congress’ approval.”

WTO

FISHERIES SUBSIDY NEGOTIATIONS

  • Negotiations on fisheries subsidies continued last week, as WTO members attempted to fulfill their 12th Ministerial Conference (MC12) commitment to expand the subsidy rules that were adopted during MC12.
  • Ambassador Einar Gunnarsson of Iceland, Chair of the fisheries subsidies negotiations, convened heads of delegations to seek WTO members’ views on negotiations.
  • Ambassador Gunnarsson expressed that members’ views are generally unchanged from the July General Council meeting.
  • The WTO updates note that a majority of members are satisfied with the draft text in the additional provisions on fisheries subsidies document or are considering minor changes, but there are some members who do not believe the “draft offers a viable path for them to join consensus.”

Mexico

FRESH TOMATOES

  • The U.S. International Trade Commission (USITC) gave notice that it will review whether terminating the investigation on fresh tomatoes from Mexico would lead to a continuation of material injury as part of the required five-year review.
  • There is currently a suspension agreement in place concerning fresh tomatoes from Mexico, which remains in effect during the review.

Trade Promotion

USDA TRADE MISSION TO GUATEMALA

  • USDA’s Foreign Agriculture Service (FAS) is accepting applications to participate in a trade mission to Guatemala City, Guatemala, from March 3-7.
  • In 2023, Guatemala imported $1.7 billion in U.S. agricultural products, and it became the top market in the region.
  • Many food and agricultural exports from the United States enjoy duty-free access to Guatemala under the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR), but there are tariff rate quotas on 12 agricultural products which include rough rice, white rice, beef, ice cream, milk, white corn, butter, cheese, and other dairy products.
  • Participants in the trade mission will be able to meet directly with Guatemalan, Honduran, and El Salvadorean buyers through business-to-business meetings.
  • FAS specifically noted export opportunities exist in poultry, pork, beef, and related products.