This year you have heard a lot from us about international trade and water quality. These are important issues that impact your ability to farm and your ability to market your products and receive a fair price for your efforts. This week we saw both positive and negative movement on trade with Mexico, as well as an important court decision regarding the legality of the Water of the United States (WOTUS) rule. This article will review that movement and explain what it could mean for your farm.
Federal Court Strikes 2015 Water Rule
This week a federal court invalidated the EPA and Army Corps of Engineers’ 2015 expansion of federal jurisdiction over small and isolated waters. After years of litigation in suits filed by dozens of state governments and trade groups, this is the first court to reach a final decision on the lawfulness of the 2015 Waters of the United States (WOTUS) rule. Several court decisions have preliminarily blocked the rule in many states while the litigation progressed.
The U.S. Court for the Southern District of Texas ruled that the agencies violated basic requirements of fair process when they concluded the 2015 rulemaking without first releasing for comment a key report that was the basis for many of their most controversial decisions.
The order came in response to suits by a group of 17 private-sector plaintiffs that included the American Farm Bureau Federation. The groups challenged the 2015 WOTUS rule as unlawfully expanding federal jurisdiction at the expense of state and municipal authority and offending basic rules of fair process. Having found the rule unlawful for procedural violations, the court did not consider the various other statutory and constitutional challenges. Several other legal challenges to the 2015 rule remain pending in federal courts across the country.
Virginia Farm Bureau joined partners across the country in conducting a comment campaign this spring, and this court decision provides strong vindication for what we have said for years — the WOTUS rule was invalid.
In December, the EPA and the Corps of Engineers proposed to repeal the rule and issue a new regulation that appropriately defines federal waters. We support this move, and believe it is time for the agencies to move on to a legally sound basis for determining federal jurisdiction over waters.
Mixed Bag on Trade this Week
This week the White House and the Office of the U.S. Trade Representative announced that the Administration is submitting a required notice, the “Statement of Administrative Action,” on the U.S.-Mexico-Canada Agreement (USMCA) to Congress. The SAA begins a 30-day period after which the Administration may submit for Congressional consideration legislation authorizing the USMCA. This is an important step in the process of moving toward a vote on the agreement. This long-awaited development is a positive step towards approving the USMCA and normalizing our trade relationship with our neighbors to the north and south.
However, in an unexpected announcement, the President also announced a 5% tariff on all Mexican imports into the United States, effective June 10. The stated purpose of the move is to pressure Mexico to do more to prevent Central American migrants trying to cross the U.S. border. The White House said Trump would be using the “International Emergency Economic Powers Act” to implement the tariff rather than pursuing Congressional approval.
The White House said they will increase the percentage of the tariff on a monthly basis until “the Illegal Immigration problem is remedied.” The June 10 5% figure will increase to 10% on July 1, to 15% on August 1, to 20% on September 1 and to 25% on October 1. The White House said Trump would be using the International Emergency Economic Powers Act to implement the tariff.
It is no coincidence that the announcement comes as the administration has been pushing for passage of the USMCA described above. It is too early to know whether the tariffs will trigger retaliatory tariffs from Mexico, or to fully understand how the tariffs will impact consumer and input costs. We strongly encourage the Administration and Congress to move forward with approval of USMCA so we can normalize our trade relations with Mexico and remove barriers to the growth of America’s depressed farm economy.