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Agriculture Secretary Optimistic States Will Recover From Trade War

Agriculture Secretary Sonny Perdue

Agriculture Secretary Sonny Perdue Jacquelyn Martin / AP Photo

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Sonny Perdue also called FCC broadband coverage maps “fake news,” saying his agency wants to get more accurate information from states.

WASHINGTON — U.S. Agriculture Secretary Sonny Perdue assured senators Thursday the Trump administration remains committed to resolving the trade war with China and that state export markets should rebound “quickly and more abundantly” if proposed numbers stick.

Testifying before the Senate agriculture committee, Perdue said China committed to purchasing an additional 10 million metric tons of soybeans on Feb. 22—bringing this year’s total to 20 million metric tons.

But Democratic senators were quick to point out the Chinese were expected to buy 32 million metric tons of soybeans, and the price per bushel has dropped $1 since President Trump took office.

“We’re all cautiously optimistic we can get a resolution,” Perdue said. “I believe honestly the president, if we get the structural reforms on intellectual property that kind of began this issue, wants to.”

U.S. Senator Michael Bennet, a Colorado Democrat, said all signs still point to imports increasing and exports decreasing with a 90 percent reduction in Chinese soybean purchases—a void Brazil is “rushing” to fill.

The $12 billion in compensatory payments to farmers the Trump administration is making isn’t enough to cover the damage done by the trade war, Bennet said.

“I just hope you’re communicating this with the president: This has not been a costless exercise that he’s been engaged in,” Bennet said. “Maybe he’ll succeed in the end, but in the meantime there are a lot of farmers going out of business as a result of what he’s done.”

Purdue said farmers are “smart business people” used to looking at market signals and production schemes to see where they’ll be most profitable while prices remain volatile. If China stays true to its trade proposals, “I think the farmers will be rewarded handsomely,” he added.

Exactly when trade negotiations with China will end and markets will recover is harder to predict, Purdue said.

U.S. Sen. Pat Roberts, a Kansas Republican and the committee chairman, said the Trump administration’s use of tariffs results in retaliatory tariffs.

“We want trade not aid,” Roberts said.

Outside of China, Canada and Mexico imposed counter-tariffs on the U.S. after Trump placed tariffs on steel and aluminum in January 2018.

Speaking at the National Governors Association winter meeting on Sunday, Marc Garneau, the Canadian minister of transport, said his country won’t ratify the U.S.-Mexico-Canada Agreement, which would replace the North American Free Trade Agreement, until the steel and aluminum tariffs are lifted. The same is true of Canada dropping $16 billion in retaliatory tariffs, he added.

Perdue said he’s trying to convince Trump to lift the tariffs and instead introduce a tariff-rate quota program on steel that would allow a certain amount of foreign product to enter the U.S. under a low tariff.

U.S. Sen. John Boozman, an Arkansas Republican, said with all the attention being paid to China the U.S. risks losing beef and pork market shares in Japan to the Trans-Pacific Partnership that President Trump declined to join and which is being implemented in the spring.

The Trump administration is planning a free-trade agreement with Japan that will be the agricultural equivalent of TPP, Perdue said.

The agriculture secretary briefly addressed rural broadband, saying “moonshot” legislation is needed to rapidly extend fiber infrastructure to underserved areas. But first the U.S. Department of Agriculture is polling individual states to find out exactly where service is because Federal Communications Commission coverage data is inaccurate, Perdue said.

“I don’t want to be political, but we believe that the FCC coverage maps are fake news,” he said. “They were primarily generated from carriers, who don’t want to see more competition.”

Dave Nyczepir is a News Editor at Route Fifty and is based in Washington, D.C.

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