USDA Details Trade Damage Estimate Calculations

Secretary of Agriculture Sonny Perdue announced this week that the U.S. Department of Agriculture (USDA) Office of the Chief Economist has published a detailed accounting of how estimated damage from trade disruptions was calculated for its support package for farmersannounced on July 25, 2019.

USDA’s Office of the Chief Economist developed an estimate of gross trade damages for commodities with assessed retaliatory tariffs by China, India, the European Union, and Turkey to set commodity payment rates and purchase levels. USDA employed the same approach often used in adjudicating World Trade Organization trade dispute cases.

“Just as we did before, we want to be transparent about this process and how our economists arrived at the numbers they did. Our farmers and ranchers work hard to feed the United States and the world, and they need to know USDA was thorough, methodical, and as accurate as possible in making these estimates.We listened to feedback from farmers on last year’s programs and incorporated many of those suggestions into today’s programs. While no formula can be perfect in addressing concerns from all commodities, we did everything we could to accommodate everyone,” Secretary Perdue said. “For a long time, China and other nations have not provided free, fair, and reciprocal access to U.S. farmers and ranchers and President Trump is the first President to stand up to them and send a clear message that the United States will no longer tolerate unfair trade practices. Our support package ensures farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe.”

In May, President Trump directed Secretary Perdue to craft a relief strategy in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions. The Market Facilitation Program (MFP), Food Purchase and Distribution Program (FPDP), and Agricultural Trade Promotion Program (ATP) will assist agricultural producers while President Trump works to address long-standing market access barriers.

“China and other nations have not played by the rules for a long time, and President Trump is the first President to stand up to them and send a clear message that the United States will no longer tolerate unfair trade practices,” Secretary Perdue said. “The details we announced today ensure farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe.

“Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers. Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them,” Secretary Perdue added.

You can read the full report here.