Washington Insider -- Thursday

Will Congress Push Back on Trade Agenda?

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Trump White House Delays Biofuel Policy Shifts

Amid mounting criticism from biofuel-backing lawmakers, a White House announcement of a plan to alter U.S. biofuels policy has been pulled back indefinitely even before it was announced.

The expectation this week was the White House would announce a plan that included making sales of E15 year-round, allowing renewable identification numbers (RINs) from exported biofuels to count toward Renewable Fuel Standard (RFS) requirements and reallocating RFS obligations that had been waived for small refiners.

But pushback from lawmakers like Sens. Chuck Grassley and Joni Ernst, both Iowa Republicans, stopped the potential announcement. Both lawmakers talked this week of President Donald Trump or his EPA having broken a promise to biofuel-supporting lawmakers, with Ernst citing an October letter in which EPA Administrator Scott Pruitt pledged not to pursue allowing RINs from exported biofuels to count toward RFS targets.

"@realDonaldTrump has said he loooovves the farmers! #Iowa is feeling that love today, as the President just assured me he 'won't sign a deal that's bad for farmers!' Thank you Mr. President," Ernst said on Twitter.

Similar sentiments were delivered by Grassley via social media, "Pres Trump helped farmers by rejecting bad ethanol deal. I appreciate. GREAT NEWS," he said.

However, those seeking a shift in biofuel policy will now focus on Congress where some lawmakers have been developing legislation to make changes. While the eventual outcome is murky, the push for biofuel policy reform will continue.

More Operations Enrolled In MPP-Dairy In Final Days Of Signup

More than 20,000 US dairy producers have enrolled in the Margin Protection Program for dairy (MPP-Dairy), with USDA Undersecretary for Farm Production and Conservation Bill Northey said this week.

Some 5,000 producers signed up last week which had been the final week of enrollment, but USDA extended that to June 8. Northey said he expects more producers to enroll than last year.

In 2017, about 20,300 dairy operations participated, accounting for 64% of US milk production — the lowest level since MPP was enacted in the 2014 Farm Bill.

Changes to the program set in place earlier this year are behind the increased participation.

Washington Insider: Will Congress Push Back on Trade Agenda?

The Hill is reporting this week that Senate Majority Leader Mitch McConnell R-Ky., will not bring up a freestanding bill to push back on President Trump's trade agenda – but that “GOP senators might be able to add such an authority to other legislation.”

Support among Republicans has grown for legislation backed by Sens. Bob Corker, R-Tenn., and Pat Toomey, R-Pa., that would give Congress power to authorize or reject any new tariffs imposed because of national security concerns.

GOP senators told The Hill that McConnell doesn't want to risk a confrontation with the president but also wants to be responsive to the concerns of colleagues who think Trump's trade agenda has run amuck.

"What I'm in favor of is getting bills passed that we have to do for the country. NDAA is certainly one of them but it is open to amendment and we'll see what happens as it moves across the floor," he said, referring to the National Defense Authorization Act, which Congress passes every year and is considered a must-pass bill.

He noted that the Senate also has to pass the farm bill – a package of agriculture subsidies – as well as appropriations bills.

The situation is complex. McConnell has laid down a marker suggesting he wouldn't block some sort of rebuke to Trump's trade policies from reaching the president's desk. That's far from an endorsement or easy pathway to passage, but McConnell is often unequivocal about certain controversial issues, The Hill thinks.

The Hill also thinks that the growing concern about administration trade policies is leading Senators to push for legislation to require President Trump to get congressional approval for tariffs implemented for national security purposes.

Corker, who is spearheading such legislation, told reporters that he will roll out his bill in the near future and wants to try to get it attached to a defense policy bill that the Senate will start work on later this week.

Under the bill, Corker said, a vote on approving tariffs invoked under Section 232 of the trade law could be expedited through Congress. The bill, if signed into law, would also be retroactive going back two years.

Corker, who is retiring at the end of his term, declined to say who is backing his bill but said he had support from senators on both sides of the aisle.

When asked if he had McConnell's support, Corker said, "I think the majority leader, my guess is, would be very receptive from a policy standpoint. Might be concerned from other standpoints."

Any legislation would likely ultimately need support from two-thirds of both chambers, enough to overcome a presidential veto. Corker acknowledged that the White House would likely not be enthusiastic about the bill, but said Congress is "a separate but equal branch."

The Hill also reported that Mexico will slap a 20% tariff on U.S. pork imports in response to the Trump administration's tariffs on steel and aluminum from key U.S. allies. "Earlier today, President Enrique Pena Nieto released a Decree in response to the United States' 232 tariffs on steel and aluminum. The United States' decision to impose these duties contradicts the international community framework on tariffs and international trade and therefore subjects them to Chapter VIII: NAFTA Emergency Measures, which allows for Mexico's Decree," Mexico's government said in a statement.

"The Decree suspends the preferential tariff treatment between the United States and Mexico, allowing the latter to implement duties on a variety of products such as pork meat, some types of cheese, apples, cranberries, whiskey, steel, motor boats, among others," it said.

Observers remind that in the run-up to the fall elections, Congress is all about politics all the time and that adage certainly includes trade policies — and that those concerns are already driving much of the policy debate. Certainly, this is a fight producers should watch closely as it proceeds, Washington Insider believes.

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