The tariff agreement signed today by U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe is a most welcome deal that will keep exports of U.S. wheat flowing to a very large and crucial market for U.S. farmers.
“This agreement puts U.S. wheat back on equal footing with wheat from Canada and Australia that currently have a tariff advantage under a separate trade deal,” said U.S. Wheat Associates (USW) Chairman and Paulding, Ohio, farmer Doug Goyings. “We applaud the negotiators from both countries who worked very hard to reach an agreement that is so important to wheat farmers and to their flour milling customers in Japan.”
“Resolving trade issues like this and building new opportunities for our wheat and other agricultural products is absolutely needed at a time when wheat farmers are dealing with another year of low prices and a depressed farm economy,” said National Association of Wheat Growers (NAWG) President and Lavon, Tex., farmer Ben Scholz. “We are very grateful for the efforts that the staff and leaders at USTR and USDA put in to reach this agreement.”
When the tariff agreement is implemented, Japan’s effective tariff on imported U.S. wheat will drop to the same level Japanese flour millers now pay for Canadian and Australian wheat. Since the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement entered into force last December, market factors have kept U.S. wheat competitive. Without this new agreement, however, U.S. wheat imports would have become less and less cost competitive to the point that Japan’s flour millers would have no other choice than to buy more of the lower cost wheat from the CPTPP member countries.
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