US, China agree to lower tariffs for 90 days 

U.S. and Chinese negotiators meeting in Switzerland over the weekend agreed to reduce tariffs for 90 days while they hold more trade talks. The United States will reduce tariffs on Chinese imports from 145% to 30%, while China will reduce retaliatory duties from 125% to 10%.

U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom said in a news release, “USMEF greatly appreciates the efforts of U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent to negotiate this agreement with their Chinese counterparts. Although this is a temporary pause, we are hopeful that it is the first step toward restoring access to China for U.S. pork and beef.”

CoBank noted in an analysis today, “While speaking on CNBC Monday morning, Treasury Secretary Scott Bessent said a starting point for discussions over the next three months can be the initial Phase One trade deal signed in January 2020, which included purchase promises of $80 billion of food and agriculture products over two years.”

“The 2020 deal also included non-tariff barriers that limit U.S. competitiveness,” CoBank said, quoting Bessent as saying, “Knowing that President Trump will enforce any deal, I think will make the Chinese very deliberate in their negotiations.”

CoBank analyst Jacqui Fatka said, “The de-escalation of tariffs with China helped boost markets in early morning activity, including soybeans that saw strong gains in overnight action. Bessent said leaders have a pathway for future meetings in this initial truce and leaders will be meeting in the next few weeks to ‘get rolling on a more fulsome agreement.'”

The American Soybean Association said that farmers in soy-producing states are hopeful that during the 90-day pause, “a long-term Phase 2 agreement can be reached that addresses Chinese tariff and non-tariff barriers to trade.”

Caleb Ragland, American Soybean Association president and a Kentucky soy farmer, said, “We are very pleased with these first steps toward resolution and appreciate that President Trump has heard our requests to quickly come to the negotiation table for agriculture producers and others who stand to suffer financial losses and lose hard-earned relationships.”

“Farmers want to play their part in supporting broad-based, long-term solutions to the administration’s concerns and help our fellow U.S. citizens when possible; but we cannot sustain tariffs that are exponentially higher than those of the first China trade war, which knocked out our largest export market overnight, if they linger into our fall harvest season,” Ragland said.

“We hope that a deal can be reached in which China commits to robust purchases of U.S. soybeans and other products very soon.”

This is a big development and one we are very pleased to hear, yet the tariff that remains in place for U.S. soy is far from inconsequential: Products purchased from our competitors in Brazil and Argentina are not burdened with this extra cost. That means China will turn to South America first for its purchases and only buy U.S. soybeans when it absolutely must.

“Also important to note, the 90-day pause will end in August — right before our harvest season. We need the administration to continue its negotiations with China to find a long-term, sustainable solution that removes retaliatory tariffs and protects market access for our agricultural products.”

ASA explained, “In the most recent marketing year, U.S. exporters shipped 46.1 million metric tons of soybeans to foreign markets, accounting for over $24 billion in sales. Of those exports, nearly 25 MMT of soybeans went to China. That volume represents 54% of U.S. soybean exports and accounts for $13 billion in value for U.S. soybean farmers.”

While the soy industry works incessantly to seek new and develop existing markets for both whole beans like those imported by China and for soy oil and meal use, it is a slow process that can take years. The China market was started in the 1980s and took more than 40 years to fully establish. Those relationships are critical, as is the ability of U.S. soy farmers to supply them with high-quality U.S. soy on aconsistent basis.

“U.S. soy’s relations with China are still encumbered by damage done in 2018-19. The industry looks to the administration to help repair and retain its relationships with key markets such as China in the weeks ahead through fruitful negotiations,” the American Soybean Association said.

National Farmers Union President Rob Larew said, “We are encouraged to see the administration responding to the concerns of farmers and ranchers by taking steps to ease trade tensions with China.”

“Farmers spent years developing China into an important market for many agricultural products; future trade agreements must build on these decades of work,” Larew said.

“While today’s news is a positive next step, farmers continue to face significant uncertainty. We are watching these negotiations closely and expect any future deal to deliver lasting, meaningful benefits for America’s family farmers and ranchers.”

National Pork Producers Council President Duane Stateler, a pork producer from McComb, Ohio, said, “America’s pork producers are encouraged by the temporary tariff reduction agreement reached by the U.S. and China.”

“We look forward to the continued collaboration and engagement between both countries to further reduce tariff and non-tariff barriers to trade. No other country holds a candle to our export opportunities in China, as many of our exported pork products, such as offals, are not widely consumed in the U.S. and have nowhere to go,” Stateler said. “U.S. pork exported to China will still face a minimum total tariff rate of 57%. Previously, U.S. pork was tariffed at 172%, which makes it impossible for U.S. pork producers to compete in that market.”