Source: POLITICO'S MORNING AGRICULTURE, 7/2/18

Major U.S. trading partners - including Canada, Mexico and China - are hitting back this week against the Trump administration's trade crackdown with retaliatory duties on almost $50 billion worth of U.S. goods.

The impact to the north: Canada's final list targets all types of agricultural goods including orange juice, maple syrup and U.S. prepared beef products. "Canada has no choice but to retaliate with a measured, perfectly reciprocal dollar-for-dollar response," Canadian Foreign Minister Chrystia Freeland said in remarks on Friday at a steel plant in Hamilton, Ontario.
As Pro Trade's Doug Palmer reported, business and farm groups alike fear that vital sectors will be hurt even more. The nation's largest farm group, the American Farm Bureau Federation, reminded the administration on Friday that many farmers need a cool down, rather than an increase, in trade tensions.

"Farm Bureau urges our trade officials to engage in discussions to resolve trade concerns before resorting to tariffs," the group said. "Tariffs targeting the many countries that export automobiles and automotive parts will potentially result in extensive additional retaliation against U.S. agricultural exports by tariffs and other restrictions."

But they know we still need to trade: The head of Canada's largest dairy-producing province told Bloomberg the nation should reconsider its new milk price policy to ease tensions with the U.S. Quebec Premier Philippe Couillard said he met with USDA Secretary Sonny Perdue last week to address the perception that Canada's new milk pricing system was created to make it more difficult for American products to compete.

Help within Canada: Now that steel and aluminum tariffs have taken effect, Canadian officials are offering $1.5 billion in aid to their workers and companies that could be squeezed by the U.S. tariffs, Pro Trade's Adam Behsudi reports. The U.S. has not offered such aid to workers affected by trade disputes, even after China began a direct assault on food imports on April 2.

Mexico will strike on Thursday: Mexico later this week will carry out the second round of a two-part process targeting almost $3 billion worth of U.S. goods. That includes almost $2.5 billion worth of agricultural products, including cheeses, pork hams and shoulders, apples, sausages, frozen potatoes, frozen cranberries, orange juice and whiskey, according to the American Farm Bureau Federation.

Some Mexican duties — such as those on pork and cheeses — went into effect on June 5 and will now be increased. "If the U.S. learned anything from the last trade dispute, it is that Mexico knows how to maximize the impact of a retaliatory tariff list," Veronica Nigh, an economist with the Farm Bureau, noted in a recent blog post. "The U.S. agricultural industry should expect that the number of agricultural products on the list will both increase and change."

If it's Friday, it must be China: The Trump administration is expected to escalate matters by the end of the week by imposing a 25 percent duty on about $34 billion worth of Chinese exports in response to concerns over intellectual property theft and forced technology transfers. China is expected to immediately retaliate by imposing a 25 percent duty on about $34 billion worth of U.S. exports, including soybeans and cars.

Let's stay together: Despite recent reports that President Donald Trump has told advisers privately that he would like to withdraw from the World Trade Organization, the president told reporters late Friday that he plans to keep the U.S. in the WTO, Pro Trade's Doug Palmer reports. "I'm not talking about pulling out," Trump told reporters on his way to Bedminster, N.J., where he owns a resort. "We've been treated very badly. ... It's an unfair situation."