USDA forecasts Record Agricultural exports in 2022
USDA is forecasting agricultural exports to reach a record $175 billion dollars next year.
Amanda Countrymen, Colorado State University associate professor, says the growth is driven by Chinese demand.
“The phase one trade deal set the stage for unprecedented exports to China across agricultural commodities. And so, there was tremendous growth in us exports of agriculture beyond what would have been expected when we think about what export trends were to have said, and if we were to just account for growth in Chinese GDP.”
Even though China is not likely to meet their total purchase commitment under phase one, agriculture has still fared better than other industries.
“Agriculture if we look at based on Chinese import data is 76% of the target as of October this year, manufacturing is 61% of the target and energy is 48% of the target.”
Looking ahead to the potential for a phase 2 agreement, countrymen expects the focus to be on China’s state-owned enterprises, and tariffs.
“When Chinese tariffs on exports on average from the rest of the world are a little over 6% while us tariffs on rest of world exports are about 3%. So, it’s important again to remember we still face these tremendous tariffs pressure between the us and China.”
She says it will also be important for the administration to consider other Asian trade agreements, including the comprehensive and progressive transpacific partnership.
“The 11 pacific rim countries continued without the United States. And while the us has agreements with many of the countries within the CPTPP and now we have a many trade agreement with Japan. It’s important to to note that we’re not a part of that agreement and the CPTPP continues to move forward. So, for example, China is petitioning to join the CPTPP and the US is not a member.”
So far, the Biden administration has not provided details on how they plan to move forward with the China trade deal or the potential for a phase 2.