USMCA Could Reduce Tariff Aid Payments

October 12, 2018 11:40 AM

With commodity prices under significant pressure, producers who grow grains, raise hogs and milk cows are relying on tariff aid payments to help pay their bills. The new North American Free Trade Agreement, now called the U.S.-Mexico-Canada Agreement (USMCA) could reduce those payments.

According to Re​uters, Agricultural Secretary Sonny Perdue says tariff payments could be reduced if retaliatory tariffs from Canada and Mexico are removed.

“We will be recalculating along as we go,” Perdue said in a phone interview with Reuters. Perdue is referring to the second series of aid payments USDA has said is a possibility.

“If the tariffs do come off and the tariff impact lessens it will have some impact over the mitigation efforts because mitigation efforts were based on the fact that they would be tariff damage related,” he said.

Farmers were initially frustrated with the payment rates and could be more frustrated if the USMCA reduces future payments.

“For corn, it’s a penny on half your production. I'm behind him,” says Mike Schropp an Iowa farmer. “The tariff subsidy money was a kick in the crotch for the dairy industry.”

Still, retaliatory tariffs on ag products will likely continue until steel and aluminum tariffs imposed by the U.S. are lifted.

“The [USMCA] deal matters longer term, but in the short term what we were hoping is to see those tariffs against our exports lifted that has yet to happen,” says Chris Galen vice president of the National Milk Producers Federation. “There is still some concern here that there's no timetable yet for lifting those tariffs.”

The USMCA is not a done deal. It needs to be approved by the leaders of each of the three countries involved, which for the U.S., includes Congressional approval.

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Spell Check

Ulysses, KS
10/16/2018 07:53 PM

  Sorry Jerome , haven’t responded sooner but I actually work for a living and pay taxes so you can draw a welfare check . Since your such a big man , why don’t you move out of your parents house and get a freakin job . Vote republican unless you want Nancy pelosi for speaker and Maxine waters for chairman of the house finance committee , surely you can see what a train wreck that will be .

Corning, AR
10/15/2018 08:11 AM

  Typical Trump induced logic...all aimed at the American farmer. Remember how he doesn't feel like all federal workers 'don't' deserve a raise? I thought the economy was booming , according to him. NAFTA redo is a joke ...look at it. All political chest thumping by this failure of a President. Wake up rural America this idiot out in 2020.

10/15/2018 10:45 AM

  People believe what they want to believe, and too often what they're told to believe. If you listen to Trump, Fox, or read Breitbart - you're told what to believe. Lies and all, including that the NY Times and mainstream media are "fake news." Well if you're in this tribe, guess what - you hold the same traits that supported Hitler in his remaking of Germany. And that's scary - cause its possibly happening in front of our eyes today. Right now, Trump is pursuing a Nationalistic approach - same as Hitler. We need to make everything ourselves and we don't need the resources or talents of other people or nations. And that scares me. Back to Ag. I'm sorry, without exports of Corn, Beans, Wheat - we can't build bins fast enough to store the grain we produce. And even if we could build them, cash commodity prices will likely tank. American Ag needs to wake up - read the tea leaves - as President - Trump is not working for American Agriculture. And when he says I know more than the Generals or I'm the only one that can fix it - don't believe him. He hasn't fixed anything. He's simply adding layers of complexity, hyperbole and chaos to a system that wasn't perfect, but it was a lot better than where Trump is trying to take us.