President Donald Trump and European Commission President Jean-Claude Juncker agreed to new talks today aimed at ending their trade war in a deal that would somehow result in Europeans buying more U.S. soybeans.
Trump, during a joint press conference at the White House with the EU leader, announced that the U.S. and European Union “will resolve the steel and aluminum tariff issues, and we will resolve retaliatory tariffs. We have some tariffs that are retaliatory.”
The EU is currently charging import taxes on about $3.3 billion worth of U.S. goods, including orange juice, cranberries, corn and rice. Those tariffs are retaliation for U.S. tariffs on steel and aluminum. The EU is also preparing a much bigger retaliation strike in the event that the U.S. follows through with threats of putting taxes on imported cars and car parts.
Beyond just the agreement to embark on a process to end the burgeoning trade war, Trump announced that the EU will be buying more soybeans.
“And the European Union is going to start, almost immediately, to buy a lot of soybeans - they're a tremendous market - buy a lot of soybeans from our farmers in the Midwest, primarily,” Trump said. “So I thank you for that, Jean-Claude. This will open markets for farmers and workers, increase investment, and lead to greater prosperity in both the United States and the European Union.”
Juncker responded: “As far as agriculture is concerned, the European Union can import more soybeans from the U.S., and it will be done.”
Neither Trump nor Juncker offered an explanation of how that would happen. The EU government does not buy soybeans and there are no European tariffs on U.S. soybeans.
Furthermore, European countries are already expected to buy more soybeans from the U.S. this year because of difficulties buying from South America. Argentina's crop was severely stunted due to drought (crushers there are buying from the U.S.) and Brazilian soybeans have become very expensive because China is increasing its purchases. Chinese importers have been mostly shunning U.S. soybeans because of the 25 percent tariff that China is levying in retaliation for U.S. tariffs.
A spokeswoman for the American Soybean Association declined to comment, and USDA Secretary Sonny Perdue, who was at the White House today, did not take questions.
The White House yesterday announced that the administration is planning a $12 billion aid package for farmers hurt by tariffs.
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