China outlines response in ongoing trade spat as US feed producers call for halt

15-May-2019 - Last updated on 15-May-2019 at 07:22 GMT

The ongoing US-China trade situation could result in another round of aid for US feed crop producers as China outlines its response to increased tariffs and feed crop producers ask for a trade deal.

The trade tension between the US and China escalated last week, with Trump, on Friday [May 10] raising tariffs on $200m of Chinese goods from 10% to 25%. China responded on Monday [May 13] with tariffs on $60bn of US imports.

Sonny Perdue, US agricultural secretary, confirmed that he had been asked to help develop an aid program to support producers through the trade spat, as reported by Reuters. The additional support would follow the US Department of Agriculture’s $12bn scheme last year, which was instigated to compensate farmers for lower prices for farm goods and lost sales stemming from international trade disputes.

Tariffs were initially placed on products coming from China following the conclusion of an investigation into practices including technology transfer, intellectual property and innovation. The response to those original tariffs from China included duties being raised on several products including feed ingredients, like soybeans.

Industry response

The US feed industry and crop grower representatives continue to call for an end to the tit-for-tat tariff situation and the conclusion of trade negotiations.

The retaliatory tariffs China has already imposed on US animal feed products lowered exports by about 5.9% in 2018, the American Feed Industry Association (AFIA) told us.

Gina Tumbarello, AFIA’s director of international policy and trade, strongly urged the Trump administration "to seek alternative means for reaching an amicable negotiation with China – one that does not further diminish the US animal food industry’s role in this crucial marketplace or result in increased costs for American farmers, ranchers and pet owners."

Similarly, the American Soybean Association (ASA) and the National Corn Growers Association (NCGA) said that they would like to see an end to the tariff situation.

Corn producers need “marketplace certainty,” rather than additional tariffs or another “penny per bushel” assistance payment, said the NCGA.

The ASA said it has been opposed to using tariffs to address the trade situation and supports efforts on trade negotiation.

Soybean producers are losing a “valuable market” while waiting for a trade deal to be established with China, commented Davie Stephens, ASA president.

The decision to increase the tariffs on Chinese products and to start the process of adding up to a 25% tariff to remaining imported products, along with China’s announced retaliation plan is generating a “dire” situation for US producers of the feed crop, added the soybean group.