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Ag economist says more details are needed on US-China trade deal

The Office of the US Trade Representative says progress is being made in US-China trade talks.

David Widmar with agricultural economic insights says this is good news for the ag industry, but more details are needed.

“We’re sort of fumbling through the dark looking for some sort of detail as producers, agribusiness, the whole farm economy, and big parts of the US economy struggle with how they make plans and how they make projections in light of all of this,” he says.

The “Phase One” trade agreement could be signed in mid-November at the Asia-Pacific Economic summit in Chile.

He says the continued trade talks will clear up the magnitude of the trade deal, but the timeframe should also be a focus.

“A deal in November isn’t going to greatly change the projections for commodity prices as producers look to close out the 2019 marketing year,” he says. “I think timing is very important.”

President Trump postponed tariffs in mid-October and it’s expected that the next round of tariffs (set for Dec. 15) would also be postponed if a deal is reached.

Widmar says he’s interested to see how China will go about implementing the policy that will make phase one viable.

“Are we going to see a removal of the tariff, are we going to see some sort of tariff quota put in place where x number of dollars or bushels of grain or pounds of livestock can be traded before tariffs get into place– I think that all sets the stage for how things roll out,” he says.

Audio: David Widmar, Ag Economic Insights