United States tariffs on China shelved

United States agriculture exports will add to farmers’ labor needs.

In 2017, 17% of the total agriculture exports from the US went to China.  In 2017 agricultural exports reached 23.8 billion, and from 2000 to 2017 agriculture exports to China increased by 700%.

However, since the beginning of 2018 China reduced and eventually stopped buying US agricultural products, motivated by the escalating trade war between the world’s two largest economies. This resulted in major losses for farmers in the last eighteen months.

Gross Domestic Product “GDP” growth in the U.S. slowed to 2% in the last quarter. The administration tried to compensate farmers for lost export sales with a $28 billion dollar aid package distributed by the Department of Agriculture.

China’s main imports from the US are:

  1. Soybeans, feed, animal hides, and alfalfa
  2. Hay
  3. Dairy and Poultry
  4. Processed Food, pork, and beef.
  5. Wheat

Shelving the tariffs on China.

On Sunday, President Trump announced that the U.S. would be shelving new tariffs on China in return for an assurance of increased agriculture purchases. As part of the deal, a tariff increase set for today won’t be imposed.

Phase 1 of this agreement anticipated to include $40 to $50 billion dollars in agricultural purchases. This includes 30 million metric tons of soybeans and an unspecified amount of pork. 

For instance, Pork export to China decreased by 55% in 2018 due to tariffs on pork. But China may buy as much as 300,000 metric tons of pork in 2019 if the agreement holds. This represents about 80% more than the 166,000 tons China bought from the US in 2017, before the start of the trade war. 

This increase in pork and agricultural exports will mean a substantial growth in sales for US Farmers. This will result in employers having an increased need for labor to keep up with the demand. An H-2A program can assist in filling the labor shortage and allow the companies to fulfill the sales increase that may result from the agreement between the United States and China.

If you have a labor shortage or would like to discuss starting an H-2A program for your company please contact us.

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Farmer, Farmer & Brown Law Firm, PLLC

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