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Vilsack Blames Expected Record Farm Trade Deficit on Strong U.S. Economy, Criticism of China

USDA Secretary Tom Vilsack blamed this year’s expected record farm trade deficit on a strong U.S. economy and U.S. criticism of major trading partner China.

Vilsack says the U.S. economy’s strength, with its stronger dollar, is largely to blame for USDA’s record 32 billion-dollar forecast Ag trade deficit this fiscal year. He says, “As a result, we’re not seeing the level of purchasing we’ve seen in the past. Secondly, we’ve seen a rather significant decrease in some of the purchases from China. They used to be our number one customer. They’re now our number two customer.”

With a trading relationship complicated by tensions as Vilsack says, “It’s pretty difficult when your number one customer’s being criticized, that they would expect that they would continue to be our number one customer.”

But Ag Republicans like South Dakota’s John Thune see a lack of administration trade deals as the main culprit. Thune says, “Market access is what our farmers and ranchers are looking for to open up the markets, so they can sell their products, and get the trade deficit back to a trade surplus, and get this net farm income back in the positive column.”

Vilsack says USDA’s trying to do that, but not with free trade deals. He says, “We’re working to diversify our efforts to move away from an over-reliance on China and some of the larger markets. It’s the reason we’ve invested a billion dollars from the Commodity Credit Corporation in the Regional Agricultural Partnership Promotion Program. It’s the reason why we’ve increased the number of trade missions.”

Trade has become an election year issue, though Vilsack was careful in discussing tariffs to level trade imbalances. He says, “We’ve had experience with this, and we know what it does to markets in agriculture.”

Though President Biden has kept some of Trump’s tariffs on China that first prompted Beijing to retaliate against U.S. farm goods. And the Ag trade deficit persists now for the fourth year since 2019.

Story by Matt Kaye/Berns Bureau; courtesy of NAFB News Service

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