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U.S. trading relationship with China still on thin ice

May 4, 2020

Tom Karst

What is the future of the U.S. trading relationship with China? 

That’s a big question for both the produce industry and the entire U.S. economy, and The Packer’s Tom Karst on May 4 talked with Richard Owen about that topic and other trade issues on May 4.

Owen, vice president of global membership and engagement at the Produce Marketing Association, said the U.S. and China don’t have a stable relationship despite the encouraging Phase 1 trade agreement inked between the two countries earlier this year.

President Trump has recently criticized China for failing to buy enough U.S. agricultural products, in addition to pointed criticism from Trump on China’s handling of the COVID-19 pandemic.

“I think part of this is the fact that this is an election year, and so politics are involved,” Owen said. China’s commitment as part of the Phase 1 agreement was to buy at least $19.5 billion more than its 2017 imports.

“China is going to be challenged with (buying their promised imports of U.S. products) this year because of the fact that their economy was almost shut down for six to eight weeks,” Owen said. “China is really going to be in a bind to make the commitments that it made to the US government for purchases.”

The hope for U.S. fresh produce exporters is that China’s demand recovers by later in the year. Owen said Trump’s trade goals appear to be centered on trying to have as much domestic consumption of U.S. farm goods within the U.S. as possible. 

“I see that as being a core part of the economic policy emerging from the reentry of the economy from COVID-19,” he said. “As the country slowly starts to move into the next phase, I do see a commitment from the administration, whether it’s the food box distribution program, whether it’s direct payments, to providing some support for the agricultural industry as much as possible to increase domestic consumption of those products.”

“At the end of the day, it’s the U.S. consumer that makes the most difference for whether the industry will have some type of decent recovery from the truly dire economic circumstances that occurred as part of COVID-19 pandemic,” he said.

Owen also talked about industry reaction to, and next steps for, the USDA’s produce box and direct payment programs.


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