By RACHEL LANE

D.C. Correspondent

WASHINGTON, D.C. — Farmers received good news regarding trade with China as February came to a close – the scheduled March 1 tariffs are not going into effect against China at this time, and China has agreed to purchase more U.S. soy in the coming year.

Too, a 2016 World Trade Organization (WTO) case the United States had against China regarding domestic support to its grain producers was found in the favor of the U.S.

The tentative, unspecific soybean purchase agreement with China influenced President Donald Trump to not put planned tariff increases into effect on March 1. The tariffs would have impacted every Chinese import and increased some existing tariffs, and some of the U.S. tariffs have been in place for a year.

U.S. tariffs on China already in place will remain in place, and Brazil has planted more soybeans this year than in previous years, but drought conditions make its harvest forecast lower than in previous years. As China purchased most of the available soybean surplus from Brazil last year, it seems to have no alternative but to purchase more soy from the U.S.

Regardless, the U.S. soy industry has taken a hit that will likely take years to recover as the country's soybean reserves have swollen and will likely not be depleted anytime soon, noted Dr. Barry Flinchbaugh, professor emeritus of ag economics at Kansas State University.

At the same time, Chinese pork producers have realized they do not need to feed as much soy to their pigs as previously thought. Those possible soy sales have been removed from the market permanently.

The March 1 tariffs would have increased the cost of items sold in the U.S. while China would have retaliated and had fewer sales of U.S. products. The lost revenue would have cost the average U.S. family of four about $2,000 annually, according to a report by Tariffs Hurt the Heartland (THH), a coalition of more than 80 trade associations and agriculture groups.

In November 2018, Americans paid an additional $2.7 billion in tariffs, according to the report data.

During the recent annual USDA Agricultural Forum near Washington, D.C., USDA Secretary Sonny Perdue, along with his Mexican and Canadian counterparts, answered questions. The three men agreed cooperation is key for the three countries, that the North American Free Trade Agreement has benefited all three and that the new U.S.-Mexico-Canada Agreement will benefit the region.

When asked about the steel tariffs in place against Canada and Mexico, Perdue said he hopes they will be lifted soon. These tariffs were placed against many countries, including China, but despite $426 million in monthly steel import tariffs, the amount of steel being imported increased in November 2018, according to the THH report.

U.S. exports for November were the lowest in 2018, down about 37 percent from the previous year.

WTO ruling

In a separate matter, the WTO dispute settlement panel announced last week that China has exceeded its commitments under WTO rules and provided trade-distorting domestic support to its grain producers.

China was found to have artificially inflated the wages of grain producers by either buying grain or by offering subsidies to farmers, which allowed them to sell their grain at lower costs on a global market. The overall effect caused global grain prices to decrease.

The dispute began in December 2016, when the U.S. settled the dispute regarding China's prices for certain rice, wheat and corn. The WTO ruled that of the years studied, 2012-15, the rice and wheat support exceeded acceptable levels. For corn, the panel decided not to issue a ruling, as China changed its policy in 2016.

“I'm very pleased that the WTO has ruled in favor of our farmers,” said Rep. Collin Peterson (D-Minn.), chair of the U.S. House Agriculture Committee. He said this should enable a fair playing field in the future and he hopes the ruling will help future negotiations between China and the U.S.