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Retaliatory Tariff Removal Discussions Press Forward

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Since June 2018, the European Union (EU) has applied 25% retaliatory tariffs on the import of select U.S. agricultural products, including dry beans. The tariffs were applied in response to a Section 232 case that resulted in the application of tariffs on imports of European steel and aluminum. 
 
Almost since the day the tariffs went into effect, the U.S. Dry Bean Council (USDBC) has been advocating for their removal. Earlier this month, the United Kingdom government announced its determination at the conclusion of the commentary period to remove dry beans from the retaliation list. This is expected to take three to four months.
 
At the same time, during several conferences held between U.S. and EU trade authorities on the sidelines of the recent G-7 meeting in the UK, EU trade authorities also announced their optimism that the tariff dispute will be resolved by years’ end.
 
While there are still details to confirm and some more work to be done, indications are the by the end of 2021 the 25% retaliatory tariffs on imports of U.S. dry beans to the UK and the EU will be removed. The USDBC will continue to monitor and report on this situation as soon as final determinations are issued.

U.S. Imposes Tariffs, Canada Retaliates

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The Trump Administration has placed tariffs on certain types of aluminum from Canada. This decision comes about a month after the implementation of the U.S.-Mexico-Canada Agreement. Canadian Deputy Prime Minister Chrystia Freeland said the tariffs are “unwarranted and unacceptable.” The Canadian government plans to impose $3.6 billion in retaliatory tariffs against the U.S. Over the next 30 days, the country will determine what U.S. products will face the tariffs. There are no agriculture commodities on the preliminary list. Agricultural interests are monitoring this skirmish for possible trade retaliation.

Dry Bean Trade Team Headed to the UK

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A team of three industry delegates will head to the United Kingdom representing the U.S. Dry Bean Council for a packed week of business meetings with buyers and industry representatives in Manchester and London. The mission will wrap up with a visit to the trade division of the European Parliament in Brussels, where delegates will get an update on the implications of the ongoing tariff dispute that places 25 percent retaliatory tariffs on U.S. dry bean imports to the EU. Learn more about the trade mission.

Tariffs Leave the Kidney Bean Crop in Limbo

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By Dan Gunderson, MPR News

Kidney beans are just one of several varieties of beans classified as dry edible beans. “When you take the North Dakota, Minnesota and southern Manitoba growing region, half of the North American dry bean crop is produced in that area,” says John Bartsch, a trader with Kelley Bean Company, who also grows beans on an eastern North Dakota farm. “And so if they have a good crop or a poor crop, it has an outsized impact on price.”

About 60 percent of kidney beans harvested are used in the United States and the rest are exported. “Domestically, they’re going down to Faribault, Minnesota for canning there and for foreign export. Most of them go to the E.U. or Central America,” says Perham, Minnesota farmer Mark Dombeck.

Lately, trade disputes have played a larger role in the direction of the industry. “Right now, our competition for exports is Canada and Argentina,” says Dombeck. “They don’t have a tariff, so we’re at a disadvantage,” The European Union has been a steady kidney bean customer for years, he adds. But last year, trade disputes disrupted the relationship when the E.U. put a retaliatory tariff on the beans after the U.S. had placed tariffs on steel and aluminum.

Read more and listen to the story.

NDSU Study Looks at the Impact of EU Tariffs

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A study from North Dakota State University, commissioned by the U.S. Dry Bean Council, concluded that retaliatory tariffs by the European Union have put U.S. farmers at a price disadvantage in international markets. This has resulted in reduced exports and potentially lost export markets in the future.
 
The study looked at the impact of tariffs on the three principal types of dry beans exported to the EU; dark red kidney, navy, and Great Northern beans. NDSU researchers concluded that tariff levels must reach an inflection point, or key level, before export amounts are negatively impacted.
 

Dry Beans Included in New MFP Program

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The new round of trade-related assistance totals $16 billion with $14.5 billion going to Market Facilitation Program payments. Rather than different rates for the various commodities, USDA Undersecretary Bill Northey said farmers will now be paid based on a single county rate. “The team has gone through and looked at the trade damage each county is feeling and we then divide that by the acreage planted within the county and will have a single payment, no matter which of the crops you plant.” This relief strategy is still being reviewed by OMB, but payments will be expedited. “The payments will come out in three different times of the year; we’re looking at a first payment coming out in July or August.” The second payment can be expected in November and the third will come in January. Agriculture Secretary Sonny Perdue said payments will likely be front-loaded, coming out shortly after the Farm Service Agency acreage reporting is wrapped up in mid-July. The first tranche of payments are the only ones guaranteed. The second and third tranches will be made if market and trade conditions are warranted.

Agriculture Not Included in EU Trade Talks

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The European Union does not want to include agriculture in its trade talks with the United States. The EU has approved the terms for negotiating a trade agreement, and it limits the focus to industrial products.
 
Agriculture is a contentious issue for Europe and the U.S. The United States wants more access for its farm products and European Union protects its heavily subsidized farm sector. A 25 percent tariff remains on U.S. navy, kidney and Great Northern beans.