Texas Sorghum Insider

March 23, 2018

Trump Announces New Tariffs on Chinese Goods—On March 22, President Trump announced that the Office of the United States Trade Representative had concluded its investigation into China’s practices regarding the transfers of intellectual property and technology. Under the rarely invoked Section 301 of the Trade Act of 1974, the federal government has the authority to take action against practices by foreign governments that violate international trade agreements or burden American commerce.

Upon conclusion of this investigation, the President authorized the USTR to pursue $60 billion worth of tariffs on Chinese goods and investments. Although this outcome did not come as a surprise, it arrives at an already turbulent time in United States’ trade policy. In a statement, the United States Grains Council, of which Texas Grain Sorghum Producers is a member, said, “While we are not surprised, we are dismayed at new tariffs announced today by the Trump Administration against China, which will almost certainly prompt immediate and painful retaliation against U.S. agriculture.”

USTR has not yet announced which Chinese exports they will target with these tariffs, but they are expected to release that list in the next 15 days. Experts fear that these new tariffs will result in reciprocal action against American exports, particularly agricultural goods. National Sorghum Producers continues to lead the sorghum industry and other stakeholders in full cooperation with the Chinese anti-dumping and countervailing duty investigations into American sorghum launched last month. Texas Grain Sorghum Association understands that this week’s unprecedented events only compound the already considerable levels of uncertainty regarding the nature of our relationship with China; TGSA is committed to providing you updates on the exhaustive efforts that are being undertaken in order to protect the interests of the sorghum industry.

Section 199A Fix Imminent—Lawmakers have reached a tentative deal to correct unintended consequences of a provision of the new tax-reform law that benefits cooperatives. There remain concerns on whether the bill can be attached to the FY18 omnibus spending bill to be considered later this month. The current deduction, intended to mimic and replace the benefits of the repealed Section 199, gives farmers more generous deductions when they sell directly to co-ops rather than privily-held or investor-owned companies. The provision has resulted in a competitive imbalance impacting numerous agricultural value chain stakeholders, including grain handlers, feed mills, seed companies, ag retailers, biofuels producers, banks, livestock marketers and dairy processors. The new legislation is intended to restore the benefit of the old Section 199 while providing some of the additional benefits cooperatives received in Section 199A. 

FMCSA Extends Agricultural Exemption to New Hauling Regulations—The Federal Motor Carrier Safety Administration (FMCSA) announced that it will extend the current waiver of the new hauling rules related to hours of service another 90 days, extending the waiver period through June 18, 2018.  This means that the new regulations related to hours of service and electronic logging devices will not apply to people hauling agricultural commodities, supplies, livestock, or horses.  The waiver does not apply to the rules regarding Commercial Drivers Licenses (CDLs) for agricultural haulers.  [Read announcement here.]