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1 [1] (January 29, 2019)

handle is hein.crs/govydn0001 and id is 1 raw text is: Cogrsioa Reeac Sevc January 29, 2019 China's Retaliatory Tariffs on U.S. Agricultural Products United States and Chinese officials are engaged in talks to resolve a trade conflict that began in 2018 and resulted in the imposition of tariff hikes by the two countries on each other's goods. The outcome of the talks could affect U.S. agricultural and food exports. President Trump and Chinese President Xi Jinping agreed on December 1, 2018, to suspend additional planned increases in punitive and retaliatory tariffs for 90 days to allow for negotiations. During that meeting, China agreed to make substantial purchases of U.S. agricultural products, according to the White House. Representatives from the Office of the U.S. Trade Representative (USTR) and other U.S. trade officials, including the U.S. Department of Agriculture's (USDA) Under Secretary for Trade and Foreign Affairs, held talks with Chinese officials in Beijing on January 7-9, 2019, the first formal meeting between the two countries since Trump and Xi met the prior December. Purchases of U.S. agricultural products were among the topics discussed in Beijing. China has levied retaliatory tariffs on almost all U.S. agricultural and food exports, among other products, in response to trade actions by the Trump Administration. In spring 2018, the Trump Administration applied tariffs under Section 232 of the Trade Expansion Act of 1962 on all imports of aluminum and steel products. The Administration also applied tariffs to certain imports from China under Section 301 of the Trade Act of 1974 in response to China's intellectual property rights and technology policies. All told, about 99% of the value of U.S. food and agricultural exports are subject to China's retaliatory tariffs. For more information on the retaliatory tariffs imposed on U.S. food and agricultural exports by China (and other retaliating countries), see CRS Report R45448, Profiles and Effects of Retaliatory Tariffs on U.S. Agricultural Exports. Agricultural Trade with China Since 2010, China has competed with Canada as the leading market for U.S. agricultural and food exports (see Figure 1). However, the tariffs China imposed in 2018 caused overall U.S. agricultural and food exports to China to decline, largely due to a drop in exports of U.S soybeans, according to USDA. U.S. agricultural and food exports to China in FY2018, amounted to $16.3 billion (calendar year 2018 data are not available), a decline of about 25% from FY2017. In its trade forecast of November 29, 2018, USDA projected that U.S. agricultural exports to China would fall to about $9 billion in FY2019 due to the tariffs. It is unclear when, or even whether, U.S. agricultural and food products would regain their market share if China were to remove its retaliatory tariffs. https://crsrepo Figure I. Leading Markets for U.S. Agricultural and Food Exports Calendar Years 2007-2017 30 25 =20 0 15 1 10 5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -Canada China -Mexico European Union 28 -Japan Source: USDA Global Access Trading System (GATS). Accessed January 28, 2019. Values are not adjusted for inflation. China's Retaliatory Tariffs China has levied retaliatory tariffs of 5%, 10%, 15%, 20%, and 25%-or a combination of those amounts-of the value of the exported product on more than 800 U.S. food and agricultural products. The first retaliatory tariffs, which were in response to the Section 232 tariffs, went into effect on April 2, 2018, and were applied to about 90 food and agricultural products. China applied tariffs to more than 500 additional food and agricultural products, including soybeans, on July 6, 2018, in response to the Section 301 tariffs. On September 24, retaliatory tariffs were levied on a third tranche of about 350 additional food and agricultural products following an escalation in Section 301 tariffs by the United States. The products subject to retaliatory tariffs span all agricultural and food categories, including grains, meat and animal products, fruits and vegetables, seafood, and processed foods. Effects on U.S. Soybean Exports China has levied retaliatory tariffs of 25% on U.S. soybeans, raising the total tariff rate to 27% and effectively restricting access to what was the largest U.S. export market for that crop in 2017. About one-half of all soybeans produced in the United States were exported prior to the application of the tariffs. Of those U.S. soybean exports, more than one-half-about $12 billion worth-were shipped to China in 2017, where they were used largely for animal feed. After China hiked its tariff on U.S. soybeans in early July 2018, U.S. exports to China essentially halted. U.S. soybean exports for January through October 2018 were 63% lower than during that time period in 2017 (see Figure 2). Meanwhile, China has increased its soybean purchases from Brazil and elsewhere. U.S. soybean prices have declined by rts.congressgov 0

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