Editorial


Wisconsin Newspaper Questions Check-Off Program for Dairy

10/09/2019

Cary Spivak published an incisive article in the Milwaukee General Centennial on September

30th, questioning the management and effectiveness of check-off programs.  At issue is the $420 million paid annually by dairy farmers.  Approximately $155 million was funneled to Dairy Management Inc. located in Rosemont, IL.  As with all check-off programs, funds should be expended on direct marketing of the commodity, consumer research and scientific evaluation with the objective of developing new products.  All expenditures are subject to audit and control by USDA-AMS.  At issue are the high salaries paid to Dairy Management officials including the CEO Thomas Gallagher who has received an average of $976,000 annually since 2010.  The top ten executives for Diary Management were paid an average of $800,000 each in 2017 with two collecting $1.2 million as determined from IRS documents.  This expenditure can be viewed against the closure of 503 dairy farms in Wisconsin and 1,600 nationwide during 2017.  Thomas Vilsak previously Secretary of Agriculture under the Obama Administration was paid $800,000 for his services to the dairy industry in 2018.

 

Disclosures have followed investigations by the Organization for Competitive Markets.  This group has requested financial and audit records relating to the beef check-off program also under scrutiny. 

 

Questions concerning mismanagement of funds are now being raised by legislators. These include Senators Mike Lee (R-UT), Rand Paul (R-KY), Elizabeth Warren (D-MA) and Cory Booker (D-NJ). Various organizations representing the interests of farmers are advocating a bill to require public disclosure of financial records for each of the mandatory check-off programs.

 

The lack of transparency associated with the dairy and beef check-off programs should be contrasted with the American Egg Board (AEB).  The 2018 Annual report detailed revenue of $25 million, small in comparison with dairy, pork and beef. Expenditure on overhead and management represented six percent of expenditures and funds for the Egg Nutrition Center (14 percent), consumer promotion (53 percent) food service promotion (8 percent) are legitimate activities under the leadership of Anne Alonzo who joined the AEB after questionable non-financial decisions by previous management emerged.

 

Senator Ron Johnson (R-WI) stated, “Pushing for greater transparency in check-off programs is an important step Congress should take to ensure that Wisconsin farmers’ hard-earned money is being used wisely.”  Senator Tammy Baldwin (D-WI) opposed the transparency provision in the recent Farm Bill based on the fact that she believed that there was insufficient support from dairy farms and groups for enhanced oversight.


 

Egg Industry News


Status of 2019 Corn and Soybean Crops

10/15/2019

The USDA Crop Progress Report released on October 15th documented continued slow progress in maturation and harvesting both corn and soybeans after a delayed start to planting due to flooding. The deficit with respect to 2018 is evident in that only a quarter of the corn and soy crops have been harvested compared to half the crop in 2018. The delay in planting is expected to negatively impact yields as documented in the October 10th WASDE Report # 593 accessible under the STATISTICS tab. Current crop condition for both soybeans and corn are highly variable as to time of planting and generally inferior to the 2018 harvest as tabulated below. High topsoil moisture levels were evident in comparison with the corresponding weeks in 2018 until the past week. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2019 harvest in October.

WEEK ENDING

Crop

October 6th

October 13th

5-Year Average

Corn Dented %

Corn Mature %

Corn Harvested %

93

58

14

96

73

26

100

92

49

       

Soybeans Dropping leaves %

Soybeans Harvested %

72

14

85

26

93

49

       

Corn will mature 25 days after the early dent stage implying harvest commencing late September as recorded extending through late October. Yield is reduced if corn and soybean fields are exposed to frost. Cold temperature before harvest contributes to higher moisture content requiring drying and susceptibility to Fusarium infection leading to DON contamination. Unseasonable freezing temperatures and up to 2 feet of snow were experienced in the Dakotas and some Northern corn/soy states during the Columbus day weekend. As yet the effect is not noticeable in the CME corn price although experience suggests that for each one percent decline in corn yield price increases by three to six cents per bushel. This said, 2019 is like no other year given trade disputes and political uncertainty.

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2019

Corn 2018

4

4

11

8

30

20

44

47

11

21

Soybeans 2019

Soybeans 2018

4

3

10

8

33

23

45

48

8

18

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

10

16

55

19

Past Year

4

9

64

23

Subsoil moisture: Past Week

10

18

56

16

Past Year

7

13

64

16

 

The USDA Grain Stocks Report released September 30th documented old crop corn stocks in all positions on September 1 st 2019 totaling 2.11 billion bushels, down one percent from September 1st 2018. Of the total stocks, 753 million bushels (34 percent) are stored on farms, up 22 percent from a year earlier. Off-farm stocks, at 1.36 billion bushels, are down 10 percent from a year ago. June to August 2019 data indicated disappearance of 3.09 billion bushels, compared with 3.16 billion bushels during the same period last year reflecting combined domestic and export demand.

Old crop soybeans stored in all positions on September 1st 2019 totaled 913 million bushels, up 108 percent from September 1st 2018. Soybean stocks stored on farms totaled 265 million bushels (29.0 percent), up 162 percent from a year ago. This suggests that farmers are holding old crop soybeans in anticipation of a settlement of the trade dispute with China expec
 


STOP PRESS

10/09/2019

Clouds Building Before Trade Talks

Recent events appear to cloud the Ministerial-level trade negotiations with China commencing tomorrow. These include sanctions against officials involved in suppressing human rights in predominantly Muslim Provinces; NBA support for Hong Kong Protesters and U.S. blacklisting tech companies in China.

At best only a limited agreement is expected, hopefully restoring agricultural exports but only if the U.S. backtracks on threatened October and November tariff escalation.


 

Crop Progress

10/07/2019

Status of 2019 Corn and Soybean Crops

The USDA Crop Progress Report released on October 7th documented continued slow progress in both corn and soybeans after a delayed start to planting due to flooding. The deficit with respect to 2018 is evident in the proportion of the corn and soy crops harvested. The delay in planting is expected to negatively impact yields as documented in the September WASDE Report accessible under the STATISTICS tab. The October WASDE is scheduled for October 10th. Current crop condition for both soybeans and corn are highly variable as to time of planting and generally inferior to the 2018 harvest as tabulated below. High topsoil moisture levels were evident in comparison with the corresponding weeks in 2018 until the past week. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2019 harvest in October.

WEEK ENDING

Crop

September 29th

October 7th

5-Year Average

Corn Dough %

Corn Dented %

Corn Mature %

Corn Harvested %

100

88

43

11

100

93

58

15

100

99

85

27

       

Soybeans Dropping leaves %

Soybeans Harvested %

55

7

72

14

87

34

       

Corn will mature 25 days after the early dent stage implying harvest commencing late September and expected to extend through late October. Yield is reduced if corn fields are exposed to frost. Cold temperature before harvest contributes to higher moisture content requiring drying and susceptibility to Fusarium leading to DON contamination.

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2019

Corn 2018

4

4

11

8

29

20

45

47

11

21

Soybeans 2019

Soybeans 2018

4

3

11

7

32

22

45

49

8

19

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

11

16

53

20

Past Year

6

13

63

18

Subsoil moisture: Past Week

10

18

57

15

Past Year

8

17

63

12

 

The USDA Grain Stocks Report released September 30th documented old crop corn stocks in all positions on September 1 st 2019 totaling 2.11 billion bushels, down one percent from September 1st 2018. Of the total stocks, 753 million bushels (34 percent) are stored on farms, up 22 percent from a year earlier. Off-farm stocks, at 1.36 billion bushels, are down 10 percent from a year ago. June to August 2019 data indicated disappearance of 3.09 billion bushels, compared with 3.16 billion bushels during the same period last year reflecting combined domestic and export demand.

Old crop soybeans stored in all positions on September 1st 2019 totaled 913 million bushels, up 108 percent from September 1st 2018. Soybean stocks stored on farms totaled 265 million bushels (29.0 percent), up 162 percent from a year ago. This suggests that farmers are holding old crop soybeans in anticipation of a settlement of the trade dispute with China expected to result in a sharp upturn in price. This is unlikely given displacement of U.S. supplies by Brazil and Argentine and the decreased requirement of China due to ASF. Token orders for soybeans amounting to four percent of projected 2018-2019 exports have been placed by China in recent weeks. Off-farm stocks, at 648
 


Egg Monthly

10/08/2019

Review of September 2019 Production Costs and Statistics.

  • September 2019 USDA ex-farm blended nest-run benchmark price was down 0.1 cent per dozen or 0.2 percent from August 2019 to 57.5 cents per dozen, but still below the U.S. average benchmark cost of production. Low price is consistent with seasonal purchase trends but accentuated by oversupply.

  • September 2019 USDA average nest-run production cost was 1.5 percent lower than August 2019 at 59.0 cents per dozen.

  • September 2019 USDA benchmark nest-run loss decreased from August 2019 to 1.5 cents per dozen.

  • September national flock ( over 30,000 hens/farm) was up 1.8 million or 0.6 percent to 314.4 million.

  • August pullet chick hatch down 9.2 percent from July to 23.1 million.

  • August exports of shell eggs and products up 12.4 percent to 770,600 case equivalents representing the equivalent of 12 million hens.

 

INTRODUCTION.

Summary tables for the latest USDA September 2019 prices and flock statistics made available by the EIC on October 8th 2019 are arranged, summarized, tabulated and reviewed in comparison with values from the previous September 12th 2019 posting reflecting August 2019 cost and production data.


 

Egg Week

10/09/2019

USDA Weekly Egg Price and Inventory Report, October 9th 2019.

  • Hen numbers in production up 0.4 million to 327.1 million.
  • Shell inventory down a moderate 1.7 percent, the second successive decline after four consecutive weekly increases.
  • USDA Midwest benchmark generic prices for Extra large and Large unchanged at 59.5, 57.5 cents per dozen respectively. Mediums down to 47.5 cents per dozen. Relative stability for two weeks suggests a market bottom. All Midwest prices below production cost for the Region.
  • Price of breaking stock down unchanged at 39.5 cents per dozen. Checks up 1.8 percent to 26.5 cents per dozen reflecting shell-egg prices. Both categories substantially below cost of production

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on October 7 th the Midwest wholesale prices for Extra Large and Large as delivered to DCs were unchanged at 59.5 and 57.5 cents per dozen respectively. Mediums were 2.1 percent lower at 47.5 cents per dozen. All prices were below the USDA average 5-Region blended nest-run benchmark of 59.0 cents per dozen in September, excluding provisions for packing and transport. The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.

The October 7th USDA Egg Market News Report (Vol. 66: No. 40) documented a USDA Combined Region value rounded to the nearest cent, of $0.66 per dozen delivered to warehouses for the week ending October 2nd. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.58 per dozen. At the high end of the range, price in the South Central Region attained $0.71 per dozen. The USDA Combined Price last week was approximately $0.22 per dozen below the three-year average and $0.48 per dozen below the price during the corresponding week in 2018.


 

USDA-WASDE FORECAST #593 October 10th 2019

10/10/2019

OVERVIEW

The October 10th 2019 USDA WASDE Report was released on due date despite the relocation of many ERS personnel from Washington D.C. to Kansas City. Projections for the 2019 corn and soybean harvests for the October WASDE are based on actual yield and harvested area with progressive updating as the season has advanced. The current unknown is the effect of predicted mid-October frost and snowfall on yield for a late-planted crop in Illinois, Iowa and Nebraska.

The corn acreage to be harvested was determined from planting completed in June at 89.9 million acres (81.8 million in 2018) down 0.2 percent from the September WASDE. In 2019 soybeans will be harvested from 75.6 million acres, down 0.3 percent from the September estimate (88.3 million acres in 2018)

The USDA projected corn yield was raised 0.1 percent to 168.4 bushels per acre, (178.9 bushels in 2018) despite late planting and delayed development. Soybean yield was reduced 2.1 percent to 46.9 bushels per acre from September, (52.1 bushels in 2018). Yield values presume suitable climatic conditions through completion of the harvest.

The September USDA projection of the ending stock for corn was lowered by 11.9 percent from the September WASDE to 1,929 million bushels. Ending stock for soybeans will be 28.1 percent lower than the September estimate at 460 million bushels. Projections for ending stocks for both corn and soybeans have influenced recent CME price quotations concurrently with reports on trade negotiations with China. It is presumed that projections are based on the assumption that there will not be a complete settlement of the trade dispute with China during the fourth quarter of 2019. China failed to commit to purchases following the June meeting between President Trump and Premier Xi at the G-20 Meeting in Osaka. Some orders representing four percent of projected 2019 exports of soybeans were forthcoming in September after the August G-7 Summit in France. In mid-September, China rescinded a ban on all agricultural imports from the U.S. imposed on August 4th. This followed the announcement of a delay in introducing a September 1st threatened tariff of 10 percent on imports from China valued at $300 billion not already subject to duty.


 

Department of Labor Changes Threshold Earning Level to Qualify for Overtime

09/30/2019

According to an overview by Andrew Ackerman and Sarah Chaney in the September 25 edition of The Wall Street Journal, , a rule issued by the Department of Labor would increase the earnings threshold from $23,660 per year to $35,568 to allow workers to qualify for time-and-a-half pay for more than forty hours per week.  The threshold figure was last established in 2004.  It is anticipated that the change will affect 1.3 million workers in the U.S. effective January 1st 2020.

 

During the past two years, various state laws have outpaced Federal requirements with California establishing a $49,920 threshold rising to $62,400 in 2023.

 

At least 100,000 supervisors or low-level managers will be affected by the overtime rule.  The previous attempt to raise the threshold in 2016 was blocked by courts after challenges by business lobbies and individual states.  It is estimated that retail-clothing employees earned $485 per week and restaurant workers $387 per week during July.  The increase in salary threshold corresponds to a rise from $455 per week to $684.

 

Patrick Pizella the Acting Secretary of Labor stated, “America’s workers will have an update to overtime regulations that will put overtime pay into the pockets of more than one million working Americans.”


 

EPA to Waive Toxicity Tests on Birds

09/30/2019

Consistent with a Federal initiative to eliminate animals in toxicity testing by 2025, the EPA has proposed that manufacturers of pesticides will no longer be required to conduct toxicity trials on upland game birds for a five-day period to ascertain potential toxicity.  The EPA considers that a single dose of a pesticide under review administered to either a songbird, game bird or waterfowl will be adequate to evaluate pesticide toxicity.

 

It has become apparent that People for the Ethical Treatment of Animals have collaborated with the EPA to establish the new protocol for testing.  The EPA based their decision to relax testing on the fact that no differences were determined using the existing five-day test and a single dose with respect to 119 pesticides marketed between 1998 and 2017.

 

While CHICK-NEWS supports expediency and minimization of effort in approving pesticides, the reduction in number of test subjects could result in a Type II statistical error. This would be not recognizing an actual risk  (“false negative”).  If the compound is non-toxic and is fed over a five day period and there is no untoward effect, then no harm has been caused. If however dosing over a five day period does induce toxicity then regulators must act accordingly with respect to the compound to preserve free-living avifauna and domestic poultry.

 

Since the proposal is subject to comments through November 1st, it is hoped that the scientific community will react accordingly since the integrity of the EPA is on the line and the motives of PETA are always subject to question.


 

Greg Hinton Named Co-Vice Chairman of the IEC

10/02/2019

Greg Hinton of Rose Acre Farms has been named as a co-vice chairman of the International Egg Commission.

 

EGG-NEWS wishes him success in his position and his election reflects favorably on his abilities, Rose Acre farms and the U.S. egg production industry.

 


 

Ahold Delhaize USA, Emphasises Sustainability

10/03/2019

Ahold Delhaize has imposed a new policy with respect to packaging of products to enhance sustainability. Banners under Ahold ownership include Food Lion, Giant Food, Hannaford and Stop and Shop in addition to the Peapod online grocery delivery.

Under the new policy, chemicals of concern including polyfluoroalkyl compounds, bisphenol A among others will be placed on a restricted-substance list for private-brand products and food packaging. In 2020, Ahold Delhaize USA will expand testing requirements to ensure that products meet standards required by U.S. regulations with respect to chemicals of concern.

The company will partner with suppliers and producers to minimize potential contamination in finished products including tea, coffee and cocoa in cooperation with the Rainforest Alliance and Fair Trade and Organic programs. Ahold Delhaize USA will report annually on progress towards a sustainable chemistry commitment in terms of the Chemical Footprint project.

In 2018, Ahold Delhaize USA initiated a program to eliminate synthetic colors, artificial flavors and preventives, MSG and high-fructose corn syrup from all private-label products by 2025. Meg Han, president of Food Lion stated “We are committed to caring for our customers and our communities. This sustainable chemistry commitment is just one more way we are demonstrating that care through our sustainability initiatives.”

Ahold Delhaize USA operates 2,000 supermarkets on the East Coast and conforms to the requirements of the parent company in the Netherlands. This includes establishing sustainability targets including 50 percent of own-brand food sales and a 20 percent reduction in food waste since 2016 and a 30 percent reduction in greenhouse gas emission based on 2008 levels. By 2025, the Company will require all plastic packaging for company brands to be recyclable, reusable or compostable.


 

Ovotrack Scan-Portal for Inventory Control

10/03/2019

Ovotrack recently installed two case-scan portals on case conveyors to enhance inventory control. Cases passing the scan-portal are subject to verification. In the event that the barcode is unreadable or detached, the case conveyor is stopped and an alarm sounds to investigate and correct any abnormality. The scan-portal provides security that labels are scannable at dispatch or at any stage in the distribution chain.


 

Market Facilitation Program Will Cost $28 Billion Over Two Years

10/09/2019

In 2018, the Administration paid farmers $12 billion as compensation for losses sustained as a result of the trade dispute with China. In July 2019, the Department of Agriculture announced a $16 billion compensatory package.

USDA received 420,000 applications for 2019 compensation with stricter requirements imposed as a result of obvious irregularities associated with the 2019 payouts. The USDA  disbursed  $5.4 billion through the end of September with projected tranches in November and December depending on market price and other considerations including possible resolution of the tariff dispute.

There is an obvious question as to the source of the funding. The Administration claims that “China is paying the tariffs” which is patently wrong and also how tariffs collected on imported items from China will be used to compensate farmers. Since allocation of the funds and their source is more political than financial, it will be some time before the books can be squared. The prevailing economic wisdom is that tariffs are ultimately borne by consumers.


 

Wegmans Open 100th Store

10/09/2019

Wegmans Food Market opened their 100th store in Raleigh, NC on Sunday September 29th.  The supermarket will feature fresh produce, artisan breads, restaurant-quality prepared foods, seafood and international items.  The facility will also include a Burger Bar, a causal restaurant counter selling a wide range of casual meals and beer and wine by the glass.  The Raleigh store is the most southern in the Wegmans chain. Five additional stores in central North Carolina including Cary, Wake Forest, Chapel Hill and Durham are planned.  Wegmans will open two New York metropolitan stores with intended additional locations in Maryland, Delaware, Virginia and Washington, DC.


 

Shelf Management to Receive Greater Attention

10/09/2019

Brokerage company, Acosta recently issued a report entitled Shelf Management, highlighting the disproportionate spending on promotion compared to shelf management.  In terms of sales and margin, shelf management is far more important in the purchase decision.  The report claims that $100 billion is spent annually on promotions compared to $300 million on shelf management. 

Acosta maintains that investment in improvements for shelves results in a measurable increase in sales compared to conventional promotion.  A number of large supermarket chains are evaluating electronic shelf labels, a development which may results in fewer SKUs.  Shelving supplier are redesigning installations to eliminate upright interruptions and to concentrate products with a high margin.  Bill Bender, VP of sales at Uniweb, the manufacturer of Variety Panel stated, “depending on the type of retailer and the retail environment, shelving will continue to play an integral part in merchandising.”  He added, “with the introduction of new technologies including smart shelves, retailers will be able to influence auditing, inventory control, merchandising and advertising applying RFID technology.”

 


 

FDA Launches FDA-Track

10/09/2019

In a September 30th announcement, Dr. Norman Sharples, Acting Commissioner of the FDA and Frank Yiannas, Deputy Commissioner for Food Policy and Response announced the release of FDA-Track.  This new dashboard is intended to provide regular updates and performance measures and represents an increased concern for transparency by the Agency.

FDA-Track was established in response to the Food Safety Modernization Act. Initial data suggests that the time required from identifying an event requiring a recall to initiating action has declined from four days in 2016 to two days in 2019.

 

FDA-Track will evaluate outcomes relating to good manufacturing practices, hazard analysis and risk-based controls for human food and animal feed.  The Dashboard will also include data relating to the Foreign Supply of Verification Program initiated in May 2017.


Frank Yiannis Deputy Commissioner of the FDA

 

Multi-State Outbreak of Cyclospora Infection Linked to Fresh Basil from Mexico

10/09/2019

After an extensive investigation, the U.S. FDA in co-operation with the Centers for Disease Control and Prevention have determined that a multi-state outbreak of Cyclospora infection was attributed to fresh basil imported from Mexico.

The distributor Siga Logistics de RL de CV located in Morelos, Mexico initiated a recall on July 24th.  Based on the decline in incidence rate the outbreak appears to be over.


 

Costco to Open 15 Warehouses in U.S. in FY 2020

10/10/2019

Costco Wholesale has indicated that it intends to invest $3 billion during the coming fiscal year ending September 2020 to open 15 U.S. stores adding to their total of 544. The company will be selective as to location, evaluating demographics, competition and population density.

Given a capital expenditure budget of $3 billion for the coming fiscal year, the investment of $100 million in the Nebraska rotisserie broiler complex to be operated by Liberty Premium Poultry appears to be small change for the company.


 

Lawsuit Challenges Texas Drone Law

10/10/2019

A lawsuit was filed in the United States District Court for the Western District of Texas challenging the constitutionality of the Texas Unmanned Aircraft statute enacted in 2013.

The National Press Photographers Association has brought suit challenging the law claiming that the provisions “chill and criminalize speech and news gathering activity protected by the First and Fourteenth Amendments”. The complaint alleges that surveillance provisions are overly broad and by preventing surveillance, may inhibit news gathering.

Of interest to the egg production industry is the provision that it is currently illegal for a drone to capture an image of property captured in the image. In addition, it is illegal to possess, disclose, display, distribute or otherwise use an image captured by a drone. This provision effectively prevents animal welfare advocate organizations from using drones to determine whether outside access for flocks is practiced in accordance with organic certification or label claims made for products or brands.

Contravention of the surveillance provision of the Unmanned Aircraft Statute will be classed as a misdemeanor. This will probably not inhibit animal rights activists and zealots. Monetary damages may be sought through a civil action, thereby dissuading these organizations from obtaining images using a drone or subsequently posting depictions of farms.


 

Michael Foods Commissions New Egg Processing Plant

10/10/2019

Michael Foods has opened a new further-processing plant for egg products valued at $85 million. The facility located in Norwalk, IA., near Des Moines, is 143,000 square feet in extent. The capital cost includes $67 million for equipment and $17 million on land and erection of buildings.

Michael Foods is a subsidiary of Post Holdings Inc., and markets brands including Crystal Farms™, Better‘n Eggs™, Allwhites™ liquid eggs and Simply Potatoes™. Michael Foods received a $3.4 million investment tax credit and close to half a million dollars in tax rebates. The company is receiving a preferential tariff on bulk water.


 

Commentary


Trade Dispute with China to Depend on Outcome of October Negotiations

10/09/2019

It is becoming apparent that the prolonged trade dispute between the U.S. and China has resulted in mutual damage to the economies of both nations.  Exports from China to the U.S. fell sharply in August and the nation is expected to announce stimulatory measures.  The U.S. in turn is diverting tariffs on imported goods from China to the relief of farmers impacted by a virtual collapse in soy exports to their major customer.  The mutual escalation in tariffs has impacted the industrial sectors of both nations. Now U.S. consumers and investors are collectively paying for the tariffs imposed by the U.S.

 

Leading up to the October 10th high-level negotiations in Washington DC, officials in China are issuing conciliatory comments.  Commerce Minister Xhong Shan stated that Beijing was committed to resolving trade disputes in a “calm, rational and cooperative manor.”  His deputy, Vice minister of commerce Wang Shouwen stated on September 29th that negotiations will proceed with a “calm and rational attitude.”  Wang opined that both side would find ways to resolve differences believing that a resolution would benefit both countries and the world.

 

The U.S. has progressively increased both the rate and an extent of tariffs and most recently hinted at the possibility of delisting Chinese companies from U.S. stock exchanges and imposing financial pressure on Beijing.  Should the September 10th talks not produce a satisfactory outcome, the U.S. will impose additional tariffs on October 15th with a further escalation in mid-December.

 

It is apparent that informal discussions concurrent with the United Nations General Assembly convinced both China and the U.S. that continuation in their trade dispute will have a global impact creating the threat of a recession.

 

The U.S. is seeking resolution of structural issues including coercive trade practices, state support of industries that compete with the U.S. and EU nations, cyberespionage and neglect of intellectual property rights.  It is doubtful that a “grand comprehensive agreement” can be achieved in October.  It will probably be necessary to proceed stepwise with a series of agreements that will ultimately achieve the objectives of the U.S. through concessions and compliance by China.


 

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Dr. Simon M. Shane
Simon M. Shane
Contact     C. V.