USDA analysts could take into account tariffs by China and Mexico against U.S. ag products in the July 12 World Agricultural Supply & Demand Estimates (WASDE) report if the duties are put in place, USDA Chief Economist Robert Johansson told Reuters in an interview. The assumption would be the tariffs would be in effect "the rest of the year," Johansson said.
"We would expect a lot to happen in the markets if these tariffs were still in place come the fall," Johansson said. "We would expect China to be purchasing as much as possible from South America. Our soybeans for their buyers would be higher priced."
The comments from Johansson are not surprising as USDA cannot incorporate such trade actions into their analysis until they are actually deployed.
USDA has already adjusted some of its forecasts in the livestock area in response to Mexican duties already put in place on U.S. pork.
Editor's note: A reminder, DTN will have full coverage of the July 12 WASDE report from the USDA building starting at 11 a.m.
EPA Releases Proposed Rule on WOTUS
Environmental Protection Agency chief Scott Pruitt issued a proposed rule on Friday to clarify the administration's intent of repealing the Obama-era Waters of the U.S. (WOTUS) rule, a signature element of President Donald Trump's deregulation agenda.
"We are making it clear that we are proposing to permanently and completely repeal the 2015 WOTUS rule and keep the pre-2015 regulatory framework in place as we work on a new, improved WOTUS definition," Pruitt said in a statement.
The proposal requests comment on the legal basis of the 2015 Obama-era WOTUS rule, which EPA and the Army Corps "believe has led to uncertainty and confusion across the country," EPA said in a statement.
EPA and Army Corps proposed the rule together. The proposal would give more time for the public and industry to provide feedback on the administration's plan to roll back the previous administration's water rule.
Tues. July 3 Washington Insider -- Trade Policy Lobby Weakened
There's a somewhat strange refrain circulating in Washington just now -- Bloomberg says that companies are complaining that the tough U.S. trade stance has fueled a lobbying blitz, but that "old playbooks are of little use in talking the Trump administration out of imposing a broad range of tariffs."
That's due in part to the president's impulsive, go-it-alone style, Bloomberg says, because it often cuts out lawmakers and leaves few paths to his decision makers. Lobbyists said they're frustrated and searching for other ways to reach the decider-in-chief.
"No one knows the answer, to be honest," Gary Horlick, a Washington trade lawyer, said. "I've been in meetings that normally would have been, 'You take chairman so-and-so, I'll work on ranking member such-and-such,' and now the meetings are, 'What do we think Trump might be interested in' -- not intellectually, but like, 'What will he see?'"
It is true that lobbying registrations on trade issues during the first quarter were the second-highest since 2010, behind only the first quarter of 2017, Bloomberg reports. There also were 257 activity filings in the first three months of 2018 from 220 companies and associations that identified tariff cases as a lobbying issue.
Then, the president imposed tariffs on steel and aluminum imports in March on grounds of protecting national security, even though it has been widely reported that the U.S. Chamber of Commerce and industry groups urged him not to pursue them because of the threat of a trade war. Bloomberg notes that the policy likely is proceeding despite opposition to duties from the business community, including a coordinated effort by a coalition of more than 100 trade groups, and jitters in the U.S. stock market "whenever the tariff saber is rattled."
But while lobbyists are still pursuing meetings with the usual targets, reaching Trump's inner circle doesn't always work, because he's been willing to overrule aides -- as when the White House announced on May 29 the duties on Chinese goods were proceeding, only days after Treasury Secretary Steven Mnuchin said they were "on hold."
Trent Lott, the former Senate majority leader, now lobbies for Squire Patton Boggs LP on behalf of clients including the Solar Energy Industries Association and NLMK USA, which is seeking an exclusion from steel import tariffs. "There's no question that the president has his hand on all these trade moves and activities," Lott said, adding that trade is something that Trump "has strong feelings" about.
In response, "some lobbyists have turned to the media to convey their message," Bloomberg says. The president is known to regularly watch the morning news show "Fox & Friends," so the National Retail Federation ran a commercial on the program in May, hoping that he'd see it, said David French, the group's senior vice president for government relations. The ad featured actor and economist Ben Stein, reprising his role as the economics teacher from the 1986 comedy "Ferris Bueller's Day Off," arguing that duties are "B-A-D Economics."
For its part, the U.S. Chamber released a new analysis this week that argues that retaliatory duties on about $75 billion in U.S.exports from China and other countries as of this week will affect each state. Michigan, for example, which helped deliver the presidency to Trump, has more than $2.3 billion in automobiles and other products subject to tariffs, the chamber's analysis shows. Chamber President and Chief Executive Officer Thomas Donohue said in a statement. "It's time to reverse course and adopt smarter, more effective approaches for addressing trade concerns with commercial partners."
One of the biggest adjustments for lobbyists with Trump compared with previous presidents is that while actions by other administrations were taken at face value, what Trump says and does may just be meant as leverage, said Frank Samolis, partner and co-chairman of the International Trade Group at Squire Patton Boggs. That's made it a challenge to interpret Trump for clients making long-term investment decisions, he said. "It certainly is a new world with Trump," he said. "People that are used to traditional trade lobbying are forced to recalibrate."
Nobody's quite figured how to best influence an unpredictable president, said Lee Drutman, a senior fellow at New America, a Washington think tank, who's written about lobbying. "A lot of companies are struggling to figure out, how do you convince this guy?" Drutman said. "He seems to be — 'whimsical' would be a generous word, 'capricious,' 'mercurial' would probably be more appropriate -— and there's really no playbook."
So, the prospects for increased trade tensions seem to be proceeding apace, without regard for business concerns. This certainly is a trend producers should follow closely as it evolves, Washington Insider believes.
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