President Trump announced during a Wednesday press conference that his meeting with European officials yielded key trade concessions, including an increase in American soy-bean and liquified natural gas exports to Europe, and a commitment to work toward eliminating non-auto tariffs entirely.
“We have agreed today to work toward zero tariffs, zero tariff barriers and zero subsidies on non-auto industrial goods,” Trump said, reciting a joint statement crafted with European Commission president Jean-Claude Juncker. “We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soy beans. The European Union is going to start almost immediately to but a lot of soybeans, they’re a tremendous market, to buy a lot of soy beans from our famers in the midwest primarily.”
“The European Union wants to import more liquified natural gas from the United States and they’re going to be a very big buyer. We’re going to make it much easier for them but they will be massive buyers, so that they will be able to diversify their energy supply,” he added.
Trump pledged to “not go against the spirit” of ongoing negotiations, presumably by refraining from implementing further tariffs, and said he would “resolve” the existing “retaliatory tariffs.”
Juncker also vowed to work toward reducing existing tariffs, which were first implemented last month in tit-for-tat fashion after the Trump administration slapped 10 and 25 percent tariffs on steel and aluminum respectively and the EU retaliated by placing tariffs on just over $3 billion in American goods. The E.U. trade chief also confirmed that he had in fact committed to importing more soy-beans and natural gas from the U.S.
The agreement comes after a series of reports Wednesday morning that indicated Trump is advocating the implementation of 25 percent tariffs on foreign-made cars, against the advice of his trade advisers. The specifics regarding auto tariffs were reportedly still being developed as Trump’s meeting with Juncker came to a close.
In other trade news, Americans are reaping the benefits of the trade war with China & Mexico, as chicken and pork prices are expected to drop dramatically due to storage freezers nearing capacity due to reduced international trade.
More than 2.5 billion pounds of meat and poultry produced by US farmers have been stockpiled in cold-storage warehouses with the amount expected to grow further, according to the latest federal data.
Record production of beef, pork, poultry and turkey has become increasingly dependent on exports as US consumers cannot buy up the huge amount of meat.
That would drive down prices for American consumers, restaurants and retailers. However, the recent import tariffs imposed by the country’s trade partners on the wide range of US goods, including agricultural produce, have slowed down sales of US meat and poultry abroad.
Earlier this year, China and Mexico, the largest foreign buyers of US meat, taxed American pork products in response to the tariffs imposed by the White House on steel, aluminum and some other goods. The measure made prices for US hams, chops and livers in those markets shoot upwards, reports Wall Street Journal.
“We’ve got too much capacity built in this industry if we’re not going to be exporting more product,” Ken Maschhoff, the chairman of Illinois-based hog-farming company Maschhoffs, told the media.
The businessman stresses that the company was considering expansion into less “geopolitically charged” regions, such as Eastern Europe or South America. The US Department of Agriculture expects the US meat industry to produce a record 102.7 billion pounds of meat in 2018.
Plunging exports along with increasing domestic stockpiles puts at risk profits for the US meat processors as well as prices for livestock and poultry producers. Lean hog futures at the Chicago Mercantile Exchange have reportedly dropped 14 percent since the end of May.
Trade risks and increasing meat supplies may lead to “one of the biggest corrections we’ve seen in the industry in several years,” said Christine McCracken, protein analyst at Rabobank, as quoted by the media.
James E Windsor, Overpasses News Desk
July 25th, 2018