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Thursday, December 13, 2018 11:48AM CST

Title: Trade Aid Payments in Limbo 12/17 11:23
Short Title: Trade Aid Payments in Limbo 12/17 11:23
Web Title:
Generic Title: DTN Ag News
Teaser: Primary Topic: DTN/Ag/Markets/International
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DTN/Ag/Markets/Grains/Soybeans

No Details So Far as Possible Federal Shutdown also Looms

The dispute over trade aid comes as the federal government has begun preparing for a partial shutdown that would include USDA in case Congress and the Trump administration do not reach a budget agreement by Friday.
By Jerry Hagstrom
DTN Political Correspondent

WASHINGTON, D.C. (DTN) -- Whether President Donald Trump will follow through on his promise to make a second round of trade aid payments -- formally Market Facilitation Program -- to farmers before the end of 2018 remained unclear Sunday following additional Chinese soybean purchases on Friday and Office of Management and Budget Director Mick Mulvaney's elevation to White House chief of staff.

Roughly $4.7 billion in aid payments to farmers hangs in the balance. USDA announced the Market Facilitation Program in August with the understanding that a first round of payments would come at harvest and a second round of payments would be announced in early December.

The dispute over the trade aid comes as the federal government has begun preparing for a partial shutdown that would include USDA in case Congress and the Trump administration do not reach a budget agreement by Friday, the day the current spending bill expires.

Agriculture Secretary Sonny Perdue and Agriculture Deputy Secretary Steve Censky both said last week that OMB was resisting the second round of payments in hopes that increased Chinese purchases would make them unnecessary. Perdue said Thursday that Mulvaney "is always looking to hold on to money." Censky said the same day in Iowa that USDA is "arm wrestling" with OMB over the Market Facilitation Program and its costs.

Perdue told reporters on Thursday that he would meet with Mulvaney on Friday. House Agriculture Committee ranking member Collin Peterson, D-Minn., said Perdue would meet with the president to discuss the payments.

USDA did not issue a statement on White House meetings on Friday. Meanwhile, Trump also announced late Friday that Mulvaney would become the acting White House chief of staff.

USDA's Office of Communications did not respond to an email asking whether Perdue's scheduled meeting had taken place or whether there had been any resolution about the issue.

On Friday, the Agriculture Department's Foreign Agricultural Service announced that private exporters had reported sales of 300,000 metric tons of soybeans for delivery to China during the 2018-19 marketing year. That announcement followed a statement from FAS Thursday that private exporters had reported sales of 1.13 metric tons of soybeans to China.

The American Soybean Association stated that initial buys from China are encouraging, but the second round of aid payments is still necessary given the sales to China are just a small fraction of the normal volume of sales expected by this time of the year.

China announced also Friday that on January 1 it will remove the 25 percent tariff imposed on vehicles in retaliation for U.S. tariffs on steel and aluminum, Bloomberg reported.

China also may buy at least 3 million metric tons of American corn, Washington Trade Daily reported.

Trump tweeted Friday, "China just announced that their economy is growing much slower than anticipated because of our Trade War with them. They have just suspended U.S. Tariff Hikes. U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!"

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow him on Twitter @hagstromreport


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