Montana agriculture groups saw benefits in the first-stage U.S.-China trade pact announced Wednesday by President Donald Trump.
Farm groups hoped for the return of progress on normalizing trade relations with China, which hasn’t been a major buyer of Montana wheat or beef, but had always been valued as potentially at top market for both. In the lead-up to the now-18-month-old trade war between the U.S. and China, Montanans appeared to be making inroads to sales in China.
“We see this as a real positive movement for the beef industry,” said Jay Bodnar, of the Montana Stockgrowers Association. The trade pact announced Wednesday addressed China’s age restrictions on U.S. beef that stemmed from decades-old concerns about bovine spongiform encephalopathy, better known as mad cow disease. China had maintained the 30-month age cutoff on the U.S. beef, even as other foreign buyers softened limits.
Bodnar said the new terms brought China’s import rules in line with other importers of U.S. beef. The pact announced Wednesday also set bloodline standards that should benefit sales of Montana bull semen.
Beef trade relations between the two nations appeared to be thawing in the year leading up to the trade war. In late 2016, China agreed to end a 13-year ban on U.S. beef that had been in place since 2003 when a single dairy cow in Washington tested positive for mad cow disease. The following fall, the Montana Stockgrowers Association and influential cattle producer Fred Wacker negotiated a beef deal with online China grocer JD.com. Those plans stalled in June 2018 when Trump announced he would impose tariffs on China to address the lopsided trade relationship between the two countries.
China bought roughly $120 billion worth of U.S. goods in 2018, while the U.S. imported $539.5 billion in Chinese goods. The trade pact is supposed to boost agriculture exports to China from $26 billion currently to $200 billion. Montana products were a small part of that equation. Trump didn’t mention wheat Wednesday, focusing instead on corn and soybeans, Heartland crops that have been clobbered by the trade war.
But northern hard red spring wheat, primarily farmed in Montana and North Dakota, should be a trade pact winner, said Dalton Henry, Vice President of policy at U.S. Wheat Associates. For years, China has been obligated under tariff rate quota to import high volumes wheat. In 2001, when China joined the World Trade Organization, it agreed to import at 9.6 million metric tons of wheat.
That quota wasn’t being honored by China, and in 2016 the United States filed a complaint over the unfulfilled quota with the WTO and prevailed. Sales of U.S. hard red winter and hard red spring wheat to China were improving before the trade war hit, Henry said.
The tariff rate quota issue was addressed in a separate agreement, that was counted by the U.S. Trade Representative as part to the benefits extended by the new U.S.-China trade pact. China is the world’s largest wheat importer.
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Montana Farmers Union President Walter Schweitzer issued a statement Wednesday calling the trade pact a step in the right direction.
“The success of the 'Phase One' deal relies heavily on whether China follows through on their promises and if the administration properly enforces the deal,” Schweitzer said. “Time will tell. At this point we are optimistic, but must face reality that it will take years before American farmers and ranchers get their markets back.”
U.S. Sen. Jon Tester, D-Mont., welcomed the trade pact news, but said work remained.
“Today’s phase one agreement with China is a welcome first step but we shouldn’t pat ourselves on the back when we have a lot more work to do to end this self-inflicted trade war," he said. "Montana producers are hurting, and I’m going to keep fighting to make sure today’s deal is enforceable and that China delivers on what they promised, because family farms and Main Street businesses are on the line.”
U.S. Sen Steve Daines was at the signing and earned a shout out from Trump, who asked him about the success of the Montana State University football team.
“He’s got a hell of a football team,” Trump said. “How did they do this year? All right? They gonna be back? They won it again? They have a good team. They have a good team.”
Daines attended the signing with Cascade County Commissioner Joe Briggs.
“What an honor to be here with Commissioner Joe Briggs of Cascade County, Great Falls Montana, for this historic U.S.-China trade signing ceremony,” Daines said in a press release. “I’ll tell you what, it means billions of dollars for our ag industry, which is a big deal for Montanans, so big shout out to President Trump and his team here.”
U.S. Rep Greg Gianforte, R-Mont., praised Trump in a statement that also credited the president for renegotiating the North America Free Trade Agreement, or NAFTA, now known as the United States-Mexico-Canada Agreement.
“The agreement with China builds upon the growing success of the trade deals President Trump has negotiated with Japan, Brazil, Mexico and Canada, our top trading partner," Gianforte said in the statement. "President Trump deserves a lot of credit for delivering trade agreements that work for America and Montana.”