Page 74 - Farm and Food Policy Strategies for 2040 Series

The U.S. and China continue to square off in a trade war that started about one year ago when

the U.S. hit China and many other countries with steel and aluminum tariffs. Since then the

tariffs have escalated sharply, halting most U.S. ag exports. Chinese retaliation also halted U.S.
beef exports, but there wasn’t much to put a stop to.

Much fanfare was made in the summer of 2017 about the Chinese agreeing to end their 20-year-
old ban on U.S. beef, but the breakthrough was not substantial because China continued to
maintain severe restrictions like a ban on hormone-treated product.

“If we could get a level of access to China like we have elsewhere in Asia, there’s no
question (China) would be a top market," Schuele said. "I don’t think there’s any question
that if we had access at the same level as Japan and Korea, we could surpass those two markets.
From the demand standpoint, absolutely.”

The U.S. shipped about $1.7 billion worth of beef to Japan and the same amount to South Korea
last year. For a comparison, the U.S. was forecast to export about $80 million of beef to China in
2018, but sales only reached about $60 million because of Chinese tariffs.

South Asia

India perhaps represents the largest market of the future for U.S. agriculture commodities, but
the country’s onerous tariff and non-tariff barriers as well as extensive subsidies aimed at

propping up domestic producers will make it nearly impossible for expanded trade in many farm

goods in the near future.

But that doesn’t mean farm groups ranging from the U.S. Grains Council to the U.S. Poultry and
Egg Export Council are not laying bets on the future of India, the second most populous country
in the world.

“Where’s the next China for us?” USDA Trade

Counsel Jason Hafemeister asked rhetorically
in a recent USDA audio posting. “Where are
we going to find the next big bump? India’s a
great place to look. There’s a billion people in

India. They have real production constraints in
agriculture.”

But he also warned that India’s potential to
be a “big bump” for U.S. exporters won’t

likely be coming any time soon.

Jason Hafemeister, USDA “It’s hard to be optimistic in the short term that
we’ll just crack the market wide open, but it’s

certainly a place where we need those opportunities and when India is in a position to negotiate
… we want to be prepared for them.”

As it stands now, recent aggression from the Trump administration could push the U.S. and India
further into a multi-pronged trade dispute or result in talks that bring the nations closer together.

72 www.Agri-Pulse.com