According to the Wall Street Journal, the U.S. and China reached a “phase one” trade deal last Friday with details yet to be released. The U.S. canceled new tariffs set to go into effect on December 15, and the Chinese will boost purchases of U.S. products, including $32 billion in farm products over the next two years.

China also made commitments on intellectual property and pharmaceutical rights, as well as stopping the forced transfer of technology from firms entering the Chinese market. If the Chinese follow through on their commitments, this deal will be positive for U.S. exports. It is too early to assess the full impact on alfalfa hay exports to China, but lowering tariffs should be positive for the Western hay industry.

The other trade deal, USMCA, picked up traction in the House of Representatives last week and appears to be on track to be passed in the coming months. This deal is expected to increase U.S. agricultural exports by $2 billion annually.

The Farm Workforce Modernization Act passed in the House last week. This bill will have the biggest impact on U.S. dairies and farmers who grow crops that require more hand labor such as winter pruning of grapes and fruit trees in California. Farm workers who are in the U.S. illegally can apply for a five-year renewable agricultural visa that covers them and their immediate family.

Seth Hoyt

Author of The Hoyt Report, providing hay market analysis and insight.