WASHINGTON — What a year! We’ve seen trade wars and bailouts, a farm bill, a partial government shutdown and a meltdown in equity markets. One thing safely may be said about 2018 — it wasn’t boring. Another thing that perhaps may be said is that it won’t be terribly missed. Still, the start to the new year also was likely to be bumpy, and uncertainties abound.
Trade disputes with major trading partners roiled markets, including agricultural markets, in 2018. President Donald Trump threatened to pull out of the North American Free Trade Agreement, but in the end, the United States, Canada and Mexico agreed on a replacement, the U.S.-Mexico-Canada Agreement (U.S.M.C.A.). The negotiating process was difficult, even bitter, and probably needlessly combative for the results achieved.
The Trump administration slapped higher tariffs on steel and aluminum imports that affected friends and trade foes alike. Those tariffs remain and still apply to Mexico and Canada, who had hoped they’d be exempted in exchange for cooperation on the U.S.M.C.A.
The Trump administration launched a unilateral effort to force China to mend its trade ways. This took the form of hikes in tariffs on about $250 billion worth of Chinese goods exported to the United States. China retaliated, raising tariffs by 25% on soybeans and other U.S. farm products, which effectively closed the world’s largest market for soybeans and other agricultural products to U.S. producers.
To quell disquiet in rural America, the Trump administration provided financial assistance to producers affected by the trade actions that included $9.6 billion in direct payments, $7.3 billion of which was earmarked to go to soybean growers.
A Dec. 1 meeting between President Trump and Chinese President Xi Jinping resulted in a truce. The United States agreed not to raise existing punitive tariffs on Chinese goods and not to extend the higher tariffs to include another $267 billion of additional Chinese products for 90 days. China agreed to begin buying U.S. agricultural products again, and it, indeed, has begun to do so, but negotiations have proved difficult, and the trade war still may escalate.
After an extended and contentious debate, Congress passed and the president signed a farm bill. The administration, which, along with House conservatives, sought more stringent and expansive work requirements for recipients of Supplemental Nutrition Assistance Program benefits but failed to achieve those ends in the farm bill. Secretary of Agriculture Sonny Perdue then announced an effort to impose some reforms to the program on the department’s own authority.
An impasse between President Trump and congressional opponents of funding for his border wall with Mexico resulted in a partial government shutdown at the year’s end. The shutdown, which was expected to extend into 2019, was the latest in a series of stumbles, many by government, that helped pull the props out from under equity share values in December.
Buckle in. 2019 is underway.