Chinese trade review
The Biden Administration wrapped up a months long review of its China trade relationship. US Trade Representative Katherine Tai announced it plans to take four steps to realign America’s trade policies toward China.
First, it plans to talk to the country about its Phase One Trade Agreement policies, pointing out China made commitments that benefit certain industries like agriculture. and must be followed through. Second, while pursuing Phase One enforcement the U-S will restart targeted tariff exclusions to mitigate the effect of some tariffs. Third, it will push its concerns not included in the Phase One agreement – like state centered and non-market practices. Finally, the Biden Administration will work with partners to ensure global competition is fair and set rules for the future.
After the announcement of tariff exclusion, the office of the trade representative published a federal notice inviting public comment. Iowa Senator Chuck Grassley says he’s concerned there is no mention of a Phase Two agreement. He claims that with Tai planning to restart tariff exclusions for US businesses, thatshows the administration will still use tariffs like the previous administration but without forcing China to negotiate.
“Well, it’s not going to create new markets—and that’s the problem. I hope it doesn’t mean they aren’t going to enforce existing trade agreements—they surely wouldn’t be lax in that area. And I suppose it’s this administration’s emphasis on domestic policy is just overriding,” Grassley said.
A look at the markets
Market analyst John Heinber has the details:
“Grain market s have been choppy this week, basically the corn market hasn’t done a whole lot since the grain stocks report. Been trading within that range. Been seeing some negative pressure this morning, maybe that’s a sign to the outside market. Plus we’re seeing harvest pressure ramp up, beans have been put in check. So now seems like the market is sitting back and waiting for demand. Soybeans again cautious, expecting to see the yields move higher on beans. China’s on holiday this week so not seeing that export demand so that’s got beans on a bit of a slippery slope. Cattle Market had a nice strong day on MOnday didn’t get much followthrough but still held some of the gains. Today we’re seeing cash trade going to do, that’s been the focus of the morning. Cattle are still focused on seeing if we have a bottom in or not, I’m still leaning to one more push lower but it’s all coming down to cash. Hogs had a great move after the hogs and pigs report but we’ve been testing support the last couple of days. The trend line that we broke out through underneath the December contract is around the 80 barrier we went down to that so far holding. So there the fundamentals need to firm up a bit.”