TRADE UPDATE

Food & Agriculture
Dec. 20, 2024

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

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HIGHLIGHTS

  • Trade Remedies: The Department of Commerce published a final rule on antidumping and countervailing duties. The rule allows for general agricultural subsidies to be countervailable and removes the agriculture and small- and medium-sized business exception to the specific rule.
  • USDA:
    • Agriculture Secretary Tom Vilsack announced the second round of Regional Agricultural Promotion Program (RAPP) grants, allocating $300 million to 67 partners.
    • The Biden-Harris Administration released a policy framework to guide potential demand-side measures to reduce the imports of commodities that are linked to deforestation.
  • Congressional Committees: Congressional Committees’ leadership elections that have trade jurisdiction are being finalized, including:
    • House Ways & Means Committee
    • House Agriculture Committee
    • House Energy and Commerce Committee
  • US Congress:
    The Joint Economic Committee heard arguments for and against President-elect Donald Trump’s approach toward tariffs as an economic tool.

“Today’s interconnected economy further complicates the story of tariffs. Our exporters are also our importers, relying on a complex web of global value chains to source the parts and materials that they use to create jobs and produce here in the United States. Rather than boosting competitiveness, tariffs on inputs increase the cost of operating in the United States.”

————Erica York, Senior Economist and Research Director at Tax Foundation

Trade Remedies

FINAL RULE PUBLISHED ON ANTIDUMPING COUNTERVAILING DUTY ADMINISTRATION

  • On Dec. 16, the Department of Commerce published a final rule was published on the “Regulations Enhancing the Administration of the Antidumping and Countervailing Duty Trade Remedies Law.”
  • The rule codifies existing procedures and methodologies and creates or revises regulatory provisions related to several matters. Among the changes are the collection of cash deposits, indicators used in surrogate country selection, application of antidumping rates in nonmarket economy proceedings, calculation of an all-others’ rate, selection of examined respondents, and attribution of subsidies received by cross-owned input producers and utility providers to producers of subject merchandise.
  • Specifically related to agriculture:
    • Commerce removed the agriculture and small- and medium-sized business exception to the specific rule.
    • Consistent with the proposed rule, the final rule allows for general agricultural subsidies to be considered countervailable. Before this change, only subsidies within a specific agriculture sector (e.g., a subsidy limited to livestock) could be considered. 

USDA

REGIONAL AGRICULTURAL PROMOTION PROGRAM

  • Agriculture Secretary Tom Vilsack announced the second round of Regional Agricultural Promotion Program (RAPP) grants, allocating $300 million to 67 partners.
  • The grants are intended to diversify export markets in regions with rising consumer demand and purchasing power including Africa, Latin America, the Caribbean, and South/Southeast Asia.
  • Vilsack established RAPP in 2023, deriving its $1.2 billion in funding from the Commodity Credit Corporation to focus on diversifying international demand for U.S. agricultural exports.

USDA DEFORESTATION FRAMEWORK

  • The Biden-Harris Administration released a policy framework to guide potential demand-side measures to reduce the imports of commodities that are linked to deforestation.
  • This framework, part of the administration’s goal to stop and reverse global deforestation by 2030, was developed through an interagency process initiated by Section 3 in Executive Order 14072.
  • This demand-side framework focuses on illegal deforestation.
  • Part of this framework is an emphasis on minimizing compliance costs such as excessive traceability and due-diligence requirements in low-risk countries.
  • The United States seeks to leverage private sector investments in supply chain traceability, due diligence systems, and earth-observation data.

Congressional Committees

HOUSE WAYS AND MEANS COMMITTEE

  • There are four new Republican members on the House Ways and Means Committee:
    • Rep. Aaron Bean (R-FL)
    • Rep. Max Miller (R-OH)
    • Rep. Nathaniel Moran (R-TX)
    • Rep. Rudy Yakym (R-IN)

HOUSE AGRICULTURE COMMITTEE

  • The House Democratic Caucus elected Rep. Angie Craig (D-MN) to be the ranking member of the House Agriculture Committee.
  • There are six new Republican members on the House Agriculture Committee:
    • Rep. Dan Newhouse (R-WA) 
    • Rep. Tony Wied (R-WI)
    • Rep. Rob Bresnahan (R-PA)
    • Rep. Mark Harris (R-NC)
    • Rep. Mark Messmer (R-IN)
    • Rep. David Taylor (R-OH)

HOUSE ENERGY & COMMERCE COMMITTEE

  • Rep. Brett Guthrie (R-KY) was elected as chair of the House Energy & Commerce Committee.
  • Rep. Frank Pallone, Jr. (D-NJ) was elected as ranking member of the Committee.

Additional Democratic Party members for committees are expected soon and will be included in a future Trade Update.

US Congress

JOINT ECONOMIC COMMITTEE HEARING ON TRADE WARS

  • The Joint Economic Committee heard arguments for and against President-elect Donald Trump’s approach toward tariffs as an economic tool.
  • Jeff Ferry, chief economist at the Coalition for a Prosperous America, highlighted the importance of Trump’s tariffs for building manufacturing capacity, maintaining domestic production of components essential to national security, and protecting high-growth domestic industries.
  • The arguments against the tariffs centered around increasing the costs of goods through higher input costs, economic inefficiencies, retaliation, and growth in protected industries at the expense of others.
    • Ed Gresser, vice president of the Progressive Policy Institute, testified about the risk that across-the-board tariffs have on the cost of goods, U.S. competitiveness, and retaliation.
    • Brendan Duke, senior director for economic policy at the Center for American Progress, argued tariffs cannot achieve the outcomes of raising revenue and increasing domestic manufacturing simultaneously. Duke also contended that across-the-board tariffs decrease the strategic economic outcomes that tariffs are meant to address.
    • Erica York, senior economist and research director at the Tax Foundation, emphasized the greater role that technological progress has on the declining share of manufacturing employment than does trade and tariffs. She also emphasized the importance of U.S. competitiveness and emphasized alternative taxation methods instead of tariffs that encourage economy-wide investment.