CHICAGO - With the apple industry racked by trade troubles with India and China, U.S. Agricultural Trade Under Secretary Ted McKinney had a tough audience when he spoke Aug. 23 at the U.S. Apple Association Marketing and Outlook Conference.
While acknowledging the Trump administration has a part in the trade war with China and India, McKinney said the ultimate White House objective is to have fair and free trade.
“We have a lot of trade disputes going on now, and I fess up, we’re part of that,” he said. “But I do profess that we’re just trying to straighten it out, set the bar straight, and set up a level playing field so it is free and fair trade around the world,” he said, stating several times that the U.S. believes in “win-win” trading relationships.
McKinney joked he was taken out to dinner the previous night by representatives of the Washington Apple Commission and the heavy makeup he was wearing was because of the “bruising” conversation with apple leaders.
The apple industry has lost out on millions in export sales to China because of that country’s retaliatory tariffs on U.S. apples. Export sales to China were $13.6 million in 2018, down from more than $24 million in 2015.
“We hope we can mitigate (trade losses)as quickly as possible,” McKinney said. “No one more than I, no one more than Secretary Perdue, and even no one more than our President wants to get to trade on a level and balanced field, and get rid of the tariffs,” he said. “But it takes two to tango.”
McKinney said that President Trump wanted to address the precarious position of the U.S. steel and aluminum industry when he came into office.
“You don’t want to have (other countries) single-handedly controlling something as basic as (the steel industry,” he said. “That’s what has led to those tariffs; we had to start bringing those industries back to life,” he said.
McKinney said he believes the Trump administration has “nearly” reached its objective and can soon bring tariffs down. In addition, he said President Trump has asked U.S. trade negotiators to seek out bilateral deals. McKinney said the U.S. may be close to announcing a bilateral trade deal with Japan.
As part of the agency’s trade mitigation program, the Trump administration also has provided several million dollars to apple groups to expand global marketing efforts.
McKinney said the Trump administration does not intend on buckling to China’s retaliatory tariffs.
“This is not the time we can retreat and see all of our efforts go waste,” he said.
India’s retaliatory tariff of 20% of U.S. apples, combined with its regular tariff of 50%, has crippled exports to that market. USDA statistics show that exports of U.S. apples to India from January through June this year totaled $50 million, off 67% from $151 million for the same period in 2018.
McKinney is bullish on trade with India over the “very long term” but said prospects were uncertain for immediate tariff relief for U.S. apple exporters.
Despite the trade troubles now, McKinney reminded the audience that meeting global food needs won’t be easy in the coming decades. With 7 billion people on the planet now about 10 billion expected by 2050, he said producers will have to double output in the next three decades. That will mean embracing technology and trade to help make it happen.
McKinney said the passage of the U.S. Mexico Canada Agreement by Congress is critical to yield further trade progress.
“I think (passage of USMCA) brings certainty to those of you who are struggling to get certainty in your lives, with all the trade disputes like a lot of plates spinning up on those rods,” he said. “For goodness sake, let’s bring one plate down, clean it up very nicely, put it on the shelf and say let’s go do business like normal,” he said.
Expanded U.S. trade with the United Kingdom is possible in the coming months, with the likelihood of a “hard” Brexit from the European Union by Oct. 31. Expanded trade with the “protectionist” European Union is unlikely, he said.
“We’re preparing to do everything we can to help lift up our friends in the United Kingdom,” he said,
McKinney praised the global nature of the U.S. Apple event. “You are coming together and covering issues as a team,” he said. “I hope you keep it up; I will be your biggest fan.”
Jim Bair, president of the U.S. Apple Association, praised McKinney for his willingness to speak to the apple industry, despite trade troubles.
“I just want to say in front of the apple industry that I want to congratulate you and compliment the administration for its transparency and willingness to meet... even if we don’t agree with the end of the conversation,” Bair said.