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Ag industry to benefit from U.S. & EU 5 year tariff suspension

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Yesterday, the United States and the European Union (EU) announced a compromise to a 17-year dispute which originated over aircraft products but included a range of products including agriculture products like wine, tractors, spirits, molasses, cheese and more.

The agreement means that the suspension of the punitive tariffs — estimated at $11.5 billion — will continue for five years while the U.S. and the EU come together and find a permanent solution while also working together to counter China’s global ambitions to dominate key industries, according to the New York Times. 

Agriculture groups were excited for this news, while others had reservations. 

In a joint statement, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) said, “That is welcome news for wheat farm families in the Northern and Central Plains.” The statement continued by congratulating the Biden Administration and U.S. Trade Representative Katherine Tai for resolving the long-running World Trade Organization dispute over aircraft subsidies and suspending retaliatory tariffs that were a barrier to U.S. wheat exports to the European Union.

Under the dispute, the EU placed retaliatory tariffs on non-durum U.S. wheat, which effectively blocked average annual imports of more than 538,000 metric tons of mainly U.S. hard red spring and some hard red winter wheat.

The U.S. Dairy Export Council and National Milk Producers Federation welcomed the break-through while also urging that further steps be taken by the EU to ensure that food and agricultural trade is not upended in the months to come.

“The bilateral commitment announced at the U.S.-EU Leaders Summit to resolve the aircraft disputes can help to normalize trade in sectors that have been harmed by retaliatory tariffs, but more work remains to get U.S.-EU trade relations on the right path,” said Krysta Harden, USDEC President and CEO. “The U.S. needs a holistic approach to Europe’s continued attempts to disrupt international trade so that our exporters have a dependable and more reasonable playing field on which to compete.”

“U.S. exporters continually have to chase new mandates by the European Union to retain our current access, even when there are no safety concerns with American dairy products,” said Jim Mulhern, NMPF President and CEO. “Too often dairy trade with the EU is a one-way street. The EU’s frequent approach to import requirements is to mandate prescriptive procedures that U.S. dairy exporters need to make time-consuming changes in order to conform just to retain access to that market for our safe products. The products we export today are entirely safe; new EU mandates that would seek to force the U.S. to change our regulatory system match theirs would do nothing to enhance that.”

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