Opinion – Treating the disease: An opportunity for US in trade war with China (via The Hill)

There is a Chinese proverb that translates as: “It is always better to endure short-term pain than to allow the disease to remain untreated.” This aphorism offers great wisdom in the U.S. trade war with China.

In late August, the United States and China engaged in an artillery duel over tariffs. China imposed retaliatory tariffs on $75 billion worth of U.S. goods in response to Washington’s announcement that it was extending tariffs on an additional $300 billion worth of Chinese goods.  President Trump threatened to use a national emergency to push for American companies to withdraw from China. Not surprisingly, China’s state-owned media continue to express  disapproval of U.S. policy.

This latest trade war escalation triggered investor panic that drove global stock markets downward, devalued the Chinese RMB to a 11-year low, and pushed funds into sovereign bonds and gold to seek stability.

In our view, this was posturing — both parties positioning themselves for a new round of trade talks in Washington.

No doubt, President Trump has been frustrated with the Chinese for resolution of a trade deal, originally negotiated by Liu He, China’s deputy premier and chief trade negotiator, but later reneged by China’s President Xi Jinping. Although talks continued in July, U.S. negotiators returned home empty-handed from Shanghai. Trump has done the right thing to step up pressure on Beijing by increasing tariffs on its goods.

Fundamentally, we believe that China will do everything it can to continue to deceive the U.S., including the use of delaying tactics to continue stealing from the U.S. and in order to take considerable advantage of America’s free and open market.

It is reported that Liu He continues to lead the Chinese trade team, suggesting that Liu still has the Xi’s trust. He recently accompanied Xi to Gansu province to visit a monument and martyrs’ cemetery of the West Route Army of Chinese Red Army, where he laid a floral basket to honor the Chinese Communist Party martyrs.

Liu again represented Xi and delivered a congratulatory letter to the 2019 Smart China Expo that opened Aug. 26 in Chongqing. During his speech, Liu called for resolution of the Sino-U.S. trade war through calm negotiation and cooperation. In response, Trump expressed his admiration of Xi as a “great leader” of China in one of his tweets.

A casual, or more-than-casual, observer might be nonplussed and ponder, “If this ‘great leader’ has fooled you twice, why would a third opportunity be provided?”

In the same speech in which he called for calm resolution, Liu argued, to no one’s surprise, that the U.S. is to blame for the trade war escalation, technology blockade and protectionism. Liu boasts that China is transforming its economy into an even more dynamic one. He contends that China has sufficient macro policy tools and means to ensure that its economy fundamentally remains sound and will maintain its momentum. Interestingly, he noted that China’s new economic growth points have been realized, and its artificial intelligence industry now is estimated to be 500 billion yuan. The subtext of his remarks is that China’s economy can absorb external shocks created by the trade war; therefore, China is not afraid of Trump’s threats.

Liu’s message is clear: First, China wants a trade deal but on its own terms. Second, pressure on China is counterproductive because it has a large arsenal to fight the trade war and counter U.S. moves.

U.S. options are straightforward: Endure short-term pain, or let the Chinese cancer to erode its free-market economy.

In 1987, China’s trade surplus with the U.S. was only $2.7 billion, one-twentieth of Japan’s. By 2018, the People’s Republic of China’s trade surplus with the U.S. had reached nearly $418 billion, 150 times what it was three decades ago. In the past 30 years, China has snatched an astronomical $4.4 trillion from the U.S. Additionally, there is an estimated $300 billion to $600 billion annual loss from China’s theft, and at least 3 million highly paid U.S manufacturing workers lost their jobs because of competition from China. Chinese government-subsidized or forced labor produced billions of dollars worth of cheap goods that have been dumped onto the U.S. market.

This newly gained wealth has helped China create a dystopian nation, modernize its military into a formidable force, take the South Sea as its inland water, expand its political influence globally, rewrite international laws and norms, export its ideology and development model to developing countries, and contend for dominance in international politics.

The U.S. must confront China’s unfair trade practices, its socialist economic structure, its intellectual property theft, its closed internet markets and other non-trade barriers. To not do so will result in the loss of U.S. position in global affairs, continued domestic economic disruption, and potentially the end of America’s greatness.

Decoupling and disengaging from China will inflict short-term pain and suffering for certain sectors, but our government and allies such as Japan can help ease it or mitigate it.

China’s strategy is to focus on a narrow scope of trade, refuse to discuss other structural problem areas, and delay the trade deal until after the 2020 election. Although it has far less U.S. imports to impose additional tariffs, it will use non-tariff measures to counter the U.S.

Accordingly, the Trump administration must do the opposite. With China currently relying on the U.S. market to keep its faltering economy afloat, Xi has no choice but to accept U.S. terms if Trump stands his ground. This is a rare opportunity for the U.S. that should not be missed.

Bradley A. Thayer is professor of political science at the University of Texas-San Antonio and  the co-author of “How China Sees the World: Han-Centrism and the Balance of Power in International Politics.”

Lianchao Han is vice president of Citizen Power Initiatives for China. After the Tiananmen Square massacre in 1989, he was one of the founders of the Independent Federation of Chinese Students and Scholars. He worked in the U.S. Senate for 12 years as legislative counsel and policy director for three senators.

EPA Seeks Public Comment on Pesticide Applications for Hemp

It is well known that the growing of industrial hemp became legal under state pilot programs as part of the 2014 federal farm bill and that the 2018 re-authorization of the comprehensive legislation included removal of hemp from the Controlled Substances Act, legalizing hemp for commercial use and production.

It is also an Article of Faith among those who closely follow public policy that it one thing to legislate and another to implement and promulgate regulations for any given piece of legislation.

Such has been the case with hemp.  Issues continue to surface at the federal, state and local level of government that require attention by the emerging industrial hemp sector.  Everything from the need for a viable federal crop insurance program for hemp, to the uncertainty being experienced by the lending community, the evolving market dynamics for this “old yet new again” agricultural commodity have to be addressed.

One salient issue which is in need of regulatory action is the use of pesticides for hemp, which falls under the purview of the United States Environmental Protection Agency (EPA).  It now appears as though the first incremental steps on this front have taken place wit the announcement by EPA that the agency has received 10 pesticide applications to expand their use on hemp.

According to EPA Administrator Andrew Wheeler “EPA is taking the next step toward registering crop protection tools for hemp in time for use during the 2020 application and growing seasons.  The Agency is announcing a 30-day public comment period on ten existing pesticide product applications for industrial hemp”.

The evolving market dynamics of commercial industrial hemp and the strong economic forecasts for hemp production in the United States has resulted in pesticide registrants intensifying their interests in garnering crop protection approvals for use on hemp.

Researchers at the University of Kentucky, College of Agriculture, Food, and Environment have identified a number of weeds, insects, and plant diseases that pose a potential threat to economically viable hemp production.  As part of the process, best management practices for the use of crop protection agents to help control pests in commercial hemp crops will have to be identified and evaluated.

The list of pesticides can be found in prepublication copy of the Federal Register notice. Comments are due 30 days after the notice publishes in the Federal Register.

Once public comments are received, EPA anticipates issuing guidance regarding the possible use of the specified products on hemp before the end of 2019 to help growers make informed purchasing choices for the upcoming growing season. Moving forward, EPA will review, approve or deny applications for use on hemp as the agency would for any other use site.

If you would like additional information regarding this, or any other issue, please contact RDL & Associates at rdlassociatesga@gmail.com.

Issue Update: Industrial Hemp

Dave Ladd, President of RDL & Associates, was recently a guest on the Linder Farm Network to provide an update regarding industrial hemp and emerging issues related to the supply chain from producer to consumer.

The growth of industrial hemp as an alternative crop continues leading to new marketing opportunities throughout the supply chain. Hemp-based products such as cannabidiol (CBD) oil have grown in popularity as natural remedies for pain, nausea, seizures, anxiety and other ailments.

Although hemp-based products like CBD oil are legal and contain little or no tetrahydrocannabinol (THC), the main compound in marijuana that provides a “high”, issues related to these products remain prevalent at all levels of government.

This segment is 2:00 minutes in duration.

For additional information regarding this and other issues, please contact RDL & Associates at rdlassociatesga@gmail.com.

Dosing, drug interactions top FDA’s questions about CBD as review continues (via Hemp Industry Daily)

The regulators in charge of U.S. policy on CBD are giving the industry a first look at federal concerns as the U.S. Food and Drug Administration (FDA) starts work looking at how cannabinoids can be used in food, drugs and dietary supplements.

Dr. Amy Abernethy and Lowell Schiller, who lead the FDA’s new work group on cannabinoids such as CBD, released a statement giving the hemp and marijuana industries an important glimpse at where the agency is headed.

But light enforcement has led to a proliferation of CBD foods and treatments, with some states giving hemp producers express permission to flout federal CBD limits.The FDA has said for years that cannabinoids cannot be used in food or dietary supplements.

The FDA held its first hearing in May to consider a new policy on CBD. No date has been set for a conclusion.

But Abernethy and Lowell listed four big health questions in their first statement after the hearing. The FDA regulators say they want to know about:

  • Safe levels of daily CBD consumption.
  • How CBD interacts with other drugs.
  • How CBD affects “special populations, like children, the elderly, and pregnant or lactating women.”
  • Possible risks of long-term CBD exposure.

The FDA has made no promises about expanding CBD access.

But Abernethy and Lowell said in the statement that the agency is “committed to evaluating the regulatory frameworks for nondrug uses, including products marketed as foods and dietary supplements.”

Guest Commentary: The Role of Newspapers in Rural Minnesota

By Julie Tesch, President & CEO (Center for Rural Policy and Development)

Have you read a newspaper lately? Was it your local newspaper? Was it in print or online?

I’m fortunate to have a daily, regional newspaper delivered to my door every day. I also have two neighboring community newspapers delivered weekly. Why do I spend this money? It is my connection to my community and local news. I can go online at any time and find out what is going on in pop culture and national politics, but I still rely on my daily and weekly printed newspapers for the majority of my local news.

But I’m part of a growing minority.

The trend is going towards online publication more every single day. I, too, get a great deal of my news online. It is quick and easy to get, but I still prefer a printed newspaper. There is just something about those pages of newsprint that I adore.

This past fall I was in Benson, MN, visiting one of our board members, Reed Anfinson. He is the longtime publisher of the Swift County Monitor-News and a true advocate for rural Minnesota. As Reed and I sat chatting in his office, he made an observation that I found profound.

“You can tell how healthy a community is by their newspaper. If they don’t have a local newspaper, then Main Street is probably suffering greatly, which means that people are moving away.”

I had never thought of a local newspaper being such an important part of a rural community. I have always taken my local newspapers for granted. They were always there giving me updates from the local school board meeting, congratulating local students on their accomplishments and having an editorial section that I may or may not agree with. I never thought about there not being a local newspaper.

Reed went on: “Without our newspaper, we don’t have the stories that draw us together as a community with a shared sense of responsibility and purpose.”

That really struck a chord with me. Who else is going to report on city council meetings? Who is going to report on Main Street businesses and their success or failure? Where will I find out the sales going on at local stores? I would like to think that I would check these stories out online, but in reality, I won’t. I’ll click on the one article I am interested in and ignore everything else on the site. With a print newspaper, I have a whole buffet of stories in front of me to read. I might or might not read all of them, but I can guarantee you that I will probably learn something new that I wasn’t expecting to learn, or I might decide to go shopping at a local business because I saw their advertisement.

When you think about rural Minnesota, I encourage you to think about your local newspaper as well. There is so much angst about “fake news” and a disdain for the media across the country. Through it all, local newspapers continue to report the news of the area, so that we as readers can stay informed and connected to our local community. When you support your local newspaper, you are also supporting your community.

To hear more from Reed Anfinson, I encourage you to watch these episodes on rural newspapers on Pioneer Public Television. You will find them enlightening.

https://video.pioneer.org/video/rural-media-today-challenges-and-opportunities-sezhsk/

https://video.pioneer.org/video/media-content-limitations-discussion-ur1pgq/

 

EPA finalizes actions on year-round E15 (via Feedstuffs)

On Friday the U.S. Environmental Protection Agency (EPA) Administrator Andrew Wheeler signed the final action that would remove the key regulatory barrier to using gasoline blended with up to 15% ethanol (E15) during the summer driving season and reform the renewable identification number (RIN) compliance system under the Renewable Fuel Standard (RFS) program to increase transparency and deter price manipulation.

“Following President Trump’s directive, today’s action expands the market for biofuels and improves the RFS program by increasing transparency and reducing price manipulation,” said Wheeler. “As President Trump promised, EPA is approving the year-round sale of E15 in time for summer driving season, giving drivers more choices at the pump.”

E15, often marketed at the pump as Unleaded88, is a fuel blend containing 15% ethanol and is approved for use in all 2001 and newer vehicles. These vehicles make up roughly 90% of the vehicles on the road today and E15 is often sold at a three to ten cent discount to Super Unleaded E10.

Before the finalized rule, the outdated Reid Vapor Pressure (RVP) regulations forced fuel retailers to restrict sales of E15 to flex fuel vehicles (FFV) only from June 1 to September 15, the peak driving season. Since that regulation is now lifted, motorists can access E15 year-around.

Secretary Sonny Perdue said in a statement: “This move to approve the year-round use of E15 in time for the summer driving season provides consumers with more choices when they fill up at the pump, driving demand for our farmers and improving the air we breathe.”

To further strengthen confidence in the RFS program, EPA will soon sign a Memorandum of Understanding with the Internal Revenue Service to promote collaboration and support efforts to prevent against RIN and blender tax credit fraud, EPA said.

Growth Energy CEO Emily Skor estimates the change will generate over 1 billion new gallons of ethanol demand in the next five years.

Jeff Broin, chief executive officer of the nation’s largest ethanol producer POET, said longer-term, “Nationwide adoption of E15 will drive the production of 7 billion gallons of biofuels, creating additional demand for 2 billion bushels of corn each year, and unlocking new domestic demand for homegrown fuels at a critical time for America’s farmers.”

Higher blends of renewable fuels such as E15 reduce fuel prices for drivers by three to ten cents per gallon and result in lower emissions, improving air quality and providing greater greenhouse gas reductions. Blending additional ethanol replaces some of the most harmful components in gasoline, and cleaner ethanol results in 43% fewer greenhouse gas emissions than gasoline, the National Corn Growers Assn. (NCGA) said in a statement.

Today, E15 is sold at more than 1,800 locations in 31 states, with many more expected in the months and years ahead, according to Growth Energy. Over the last decade, Growth Energy has worked with top fuel retailers, like Sheetz, to expand options for American motorists.

“This fix provides major regulatory relief for all retailers seeking to offer lower-cost, higher-octane options at the fuel pump,” said Mike Lorenz, executive vice president for Sheetz. “For too long, retailers had to pay millions to retool and relabel pumps each summer and fall, which creates needless confusion for drivers.

The petroleum industry has vowed for years to sue the EPA over the E15 rule.

“The key for this rule is not just that it approves year-round E15, but that it does so based on the best science and legal precedents that will survive the Big Oil onslaught in court. The petroleum industry has tried everything to stop this day from coming. It’s no surprise they don’t want to compete with E15, which is lower-cost, cleaner, and higher-octane,” said Iowa Renewable Fuels Assn. executive director Monte Shaw.

IRFA also expressed appreciation that the final rule did not include demand destroying provisions camouflaged as so-called RIN reforms. The EPA said it is finalizing regulatory changes to reform certain elements of the RIN compliance system of the RFS program to increase transparency and deter price manipulation in the RIN market.

The reforms include requirements for public disclosure if a party’s RIN holdings exceed certain thresholds and additional data collections to improve EPA market monitoring capability. These new reforms will also help EPA continue to gather the information needed to decide whether further action is needed to ensure stability in the RIN market.

NCGA submitted comments to EPA in April which highlighted the impact of EPA’s expansive RFS waivers to large, profitable refineries, which have taken a toll on farmers by undercutting the RFS and reducing corn demand. Since early 2018, EPA has granted 53 RFS exemptions to refineries for the 2016 and 2017 RFS compliance years totaling 2.61 billion ethanol-equivalent gallons of renewable fuel.  EPA currently has 39 waiver petitions pending for the 2018 RFS compliance year.

“While corn farmers are immensely grateful that the barrier to year-round E15 has been lifted, we won’t be able to reap the full benefits if EPA continues to allow oil companies to avoid blending biofuels in accordance with the RFS,” NCGA president Lynn Chrisp said.

Rewewable Fuels Assn. president and CEO Geoff Cooper added the industry is cognizant, however, that the promise of the E15 announcement could be undermined if EPA continues its unprecedented assault on the RFS with indiscriminate small refinery hardship waivers.

“Against the intent of Congress, EPA has been granting RFS exemptions to refiners without requiring them to demonstrate their claimed ‘hardship’ is somehow connected to the RFS. The demand destruction caused by EPA’s waivers must end. We urge the President to build upon the momentum of today’s announcement by reining in EPA’s abuse of the small refiner exemption program,” Cooper said.

Perdue added, “While the Trump Administration and USDA are expanding the ethanol market in the United States, we continue to fight for more export markets in Brazil, Mexico, China, and other countries across the globe.”

Farmers Tout Efforts to Reduce Emissions Amid Climate Pressure (via CQ)

Witnesses at a Senate hearing Tuesday pushed back against an environmental narrative they say has demonized agriculture and overlooked farmers and ranchers’ efforts to reduce greenhouse gas emissions.

Several witnesses and senators at a Senate Agriculture, Nutrition and Forestry Committee meeting alluded to congressional Democrats’ broad policy statement on climate change and income equality, the Green New Deal. They worried about potential federal mandates resulting from the statement’s call for the government to work with farmers and ranchers to reduce pollution and greenhouse gases as much as possible, and its request for sustainable farming and land use practices.

Debbie Lyons-Blythe, a Kansas rancher, and Matthew Rezac, a Nebraska corn and soybean grower, said they and others in agriculture already manage their lands to sequester carbon in grasslands and use technology to control erosion, protect water quality and reduce soil erosion. Lyons-Blythe and Rezac said agriculture is working to address climate change.

But Rezac said many in agriculture are struggling after five years of low prices and will be cautious about taking on new expenses.

“I know the weather is changing, but I try to control what I can control,” he said.

Rezac and Lyons-Blythe found a receptive audience. Chairman Pat Roberts, R-Kan., and ranking member Debbie Stabenow, D-Mich., said agriculture is dealing with extreme swings in weather, drought and other climate change-related challenges.

Frank Mitloehner, a University of California-Davis professor and air quality expert, blamed a 2006 global study by the United Nations’ Food and Agriculture Organization for the view among policy makers and the general public that livestock is a major source of greenhouse gases.

Mitloehner, who has worked on federal and international environmental projects on livestock and the food system, said the FAO study used different methods in measuring greenhouse gas emissions from livestock production and from cars, trucks and other modes of transportation. Researchers concluded livestock production worldwide accounted for 18 percent of greenhouse gas emissions, exceeding transportation.

In the U.S., the Environmental Protection Agency ranks agriculture as the fifth-largest source of greenhouse gas emissions at 9 percent. Mitloehner said 3.9 percent of that total comes from livestock. He said emissions have declined by 11.3 percent since 1961 as the number of U.S. dairy cows and beef cattle has fallen. In 1950, there were 25 million dairy cows, and today there are 9 million cows. Today’s beef cattle total 90 million heads, down from 140 million in 1970.

Mitloehner told the committee the study has made animal agriculture a target of climate change activists.

Tom Vilsack, Agriculture secretary in the Obama administration, said Congress should see climate change as an opportunity to invest in testing out technology and practices that will give farmers and ranchers tools to run their operations on a net-zero emission basis. Vilsack, president and CEO of the U.S. Dairy Export Council, called for more funding of public agricultural research into products from farm and ranch waste that reduce emissions and provide farmers with ways to increase their incomes.

He also said the Agriculture Department needs to speed up regulatory reviews so U.S. farmers don’t fall behind international competitors developing ways to adapt to climate change. He cited an animal feed additive currently under review in the European Union that will reduce emissions of methane, a damaging greenhouse gas. The EU will likely finish its review in about a year while Vilsack said a similar review in the U.S. could take two or more years.

Biofuel Groups Maintain Hot Spending Amid Ethanol Debate (via CQ)

Ethanol groups maintained their strong lobbying presence in the year’s first quarter, a pivotal time for them as the EPA considers a rule to allow the year-round sale of E15, a gasoline variety mixed with 15 percent ethanol.

The use of E15 between June and September is banned under the Renewable Fuel Standard that sets minimum levels of plant-derived products to be used in transportation fuels. But biofuels advocacy groups and corn-state members of Congress have urged the EPA to lift that barrier, and the public comment period on an EPA proposal to do so closed Monday.

While factions of the oil and natural gas industries have warned they will sue over the proposal, putting the EPA rule into force would mark a long-held goal of the ethanol community.

“With year-round E15, EPA has the opportunity to give American farmers and producers the ability to grow greater demand and expand market access for their homegrown fuel,” Emily Skor, CEO of Growth Energy, an ethanol trade organization, said at a March field hearing EPA held in Ypsilanti, Mich.

Lobbying reports filed with the Senate show an uptick in spending from key biofuels groups, including Sioux Falls, S.D.-headquartered ethanol firm POET LLC, and the trade groups Renewable Fuels Association and Growth Energy.

POET spent significantly more compared to the final quarter of 2018, jumping from $170,000 to $360,000. Growth Energy also reported a spike in lobbying costs, increasing from $410,000 to $440,000 between quarters. The National Corn Growers Association spent $110,000 in the first quarter of 2019, versus $100,000 the period before. And the Renewable Fuels Association, which has yet to disclose its latest in-house lobbying costs, spent $60,000 from January through March on an outside lobbying firm, compared to $20,000 the previous quarter.

Frank Macchiarola, of the American Petroleum Institute, said on an April 25 call that API would sue if the rule is finalized. EPA has said it would finish the rule-making process by June, in time for E15 to be sold over the summer.

Critics of the Renewable Fuel Standard say it is harmful to the environment, creates a false market and hurts vehicles not designed to run on ethanol-blended fuels.

“EPA should focus on protecting consumers from mis-fueling,” said Nicole Vasilaros of the National Marine Manufacturers Association, which opposed the proposal. “It’s bad for the environment and it’s bad for the country.”

RFS backers say the program is vital to lower greenhouse gas emissions. But the environmental legacy of the policy is questionable: It has consistently missed its statutory targets to cut greenhouse gas emissions, according to a General Accountability Office report published in 2016.

At least one biofuel group decreased in-house lobbying. The National Corn Growers Association spent $110,000 in the first quarter, down from $130,000 in the previous period.

USDA Notice Regarding Importation of Hemp Seeds

The passing of the Agriculture Improvement Act of 2018 (2018 Farm Bill, Section 10113) removed hemp and hemp seeds from the Drug Enforcement Administration’s (DEA) schedule of Controlled Substances. This action removed hemp and hemp seeds from DEA authority for products containing THC levels not greater than 0.3 percent. Therefore, DEA no longer has authority to require hemp seed permits for import purposes.
 
U.S. producers and hemp seed exporters have requested assistance from USDA to provide an avenue for hemp seed exports to the United States. The U.S. Department of Agriculture (USDA) regulates the importation of all seeds for planting to ensure safe agricultural trade. Under this authority, USDA is providing an alternative way for the safe importation of hemp seeds into the United States.
 
Importation of Hemp Seed from Canada
 
Hemp seeds can be imported into the United States from Canada if accompanied by either: 1) a phytosanitary certification from Canada’s national plant protection organization to verify the origin of the seed and confirm that no plant pests are detected; or 2) a Federal Seed Analysis Certificate (SAC, PPQ Form 925) for hemp seeds grown in Canada.
 
Importation of Hemp Seed from Countries other than Canada
 
Hemp seeds may be imported into the United States from countries other than Canada if accompanied by a phytosanitary certificate from the exporting country’s national plant protection organization to verify the origin of the seed and confirm that no plant pests are detected.
 
Hemp seed shipments may be inspected upon arrival at the first port of entry by Customs and Border Protection (CBP) to ensure USDA regulations are met, including certification and freedom from plant pests.
 
Questions or requests for information regarding hemp can be sent to farmbill.hemp@usda.gov.
 
More information about industrial hemp production is available at http://www.ams.usda.gov/rules-regulations/farmbill-hemp.

Trade Jitters, Hemp Concerns Top Appropriations Hearing (via CQ)

Senate appropriators had trade woes and the promise of industrial hemp on their minds Thursday as they sought assurances from Agriculture Secretary Sonny Perdue of better times for farmers in their states.

Perdue testified before the Senate Agriculture Appropriations Subcommittee on the president’s $15.7 billion request for discretionary funding for the Agriculture Department. The request is more than $4.2 billion lower than the enacted level for fiscal 2019 and includes cuts to research, rural housing, international humanitarian food programs and other areas popular with lawmakers.

Subcommittee members asked about the proposed reductions, but indicated they are likely to ignore the proposals as they have with previous Trump administration budget requests.

Chairman John Hoeven, R-N.D., said he’ll instead push to increase funding for the department to implement the 2018 farm bill (PL 115-334), a priority for farm state lawmakers. Perdue said he would welcome a bump up in the $15 million the farm bill provided.

The farm bill removed hemp from the Controlled Substances Act and opened the door to expanded production of the versatile plant, which is part of the cannabis family that lacks the high of marijuana. A number of states authorized limited production under research provisions of the 2014 farm bill. Hemp seems to have captured the interest of farmers looking for a new cash crop.

Jeff Merkley, an Oregon Democrat and subcommittee ranking member, and Jon Tester, a Montana Democrat, pressed Perdue to expedite the release of regulations for states to follow. He disappointed them with a proposed timetable that aims for release of hemp rules in time for the 2020 crop year rather than 2019

Perdue also said he was unaware of complaints Tester said he has received from Montana farmers that the Drug Enforcement Administration is blocking the importation of Canadian hemp seeds they need for planting. The agency told CQ that it no longer has oversight of hemp because of the farm bill.

Trade Worries

But trade was a recurring theme from both Republicans and Democrats, who have called on the Trump administration to lift steel and aluminum tariffs, particularly on North American Free Trade Agreement (NAFTA) partners Mexico and Canada.

“We’re advocating to the president that he can accomplish his goals in revitalizing the steel industry and aluminum industry in the U.S. through a quota system that is combined with a tariff when they exceed that quota,” Perdue said in a question from Wisconsin Democrat Tammy Baldwin. “Hopefully, he will come to see that is an effective tool to continue to support our domestic steel industry as well.”

Baldwin asked about the status of national security Section 232 steel and aluminum tariffs the United States imposed on the trading partners in 2018. Leaders in Canada and Mexico say their legislatures will not vote to approve the proposed United States-Mexico-Canada trade agreement to replace NAFTA unless the tariffs are lifted.

Congressional lawmakers whose constituents have been affected by retaliatory duties Canada and Mexico have placed on U.S. goods want the U.S. tariffs and retaliatory tariffs ended before they are willing to vote on the agreement. Baldwin said that Mexico’s retaliatory tariffs have cut Wisconsin cheese exports at a time when dairy farmers are struggling with several years of low market prices.

Perdue, a booster of Trump’s policies in general, is considered a pragmatist on trade. He is credited along with others political leaders of convincing Trump in April 2018 to remain in NAFTA until a replacement trade pact is in place. The proposed agreement would replace NAFTA if it is approved by national legislatures in the three countries.

Hoeven asked when U.S.-China talks could wrap up and agricultural exports to China rebound. China has made purchases of soybeans since the trade talks started, but the volume is still below what it was before Beijing cut its purchases in retaliation for U.S. tariffs on Chinese exports valued at $250 billion.

“While we’re negotiating, what about additional sales?” asked Hoeven, who added that farmers are concerned about low prices and lost sales.

“I’m cautiously optimistic, but with China it’s never over until it’s over,” Perdue said. “If we can consummate a deal with China it will be extremely good for U.S. agriculture as well as the U.S. economy.”

Perdue said talks also include non-tariff issues that are important to agriculture such as standardized protocols for inspections of farm goods.

Hoeven suggested that if talks are not resolved soon, “that they continue purchases as a sign of good faith while the negotiations are going on.”