Discussions are ongoing within the Trump administration on whether to lift countervailing duties (CVDs) applied to Moroccan and Russian fertilizer imports, with the Agriculture Department and the Office of the U.S. Trade Representative divided over how to proceed.
Deputy Agriculture Secretary Stephen Vaden is supportive of the idea, according to three people familiar with the situation granted anonymity to describe administration dynamics. But USTR Jamieson Greer has been pushing back.
“There’s some friction between Greer and Vaden,” a person familiar with the situation told Agri-Pulse.
This isn’t the first time the two have been in opposite corners on the issue. Before becoming USTR, Greer was a trade lawyer at King and Spalding, where he represented fertilizer producer Simplot.
Greer was among the team of lawyers that represented the company when Russia’s PhosAgro and Morocco’s OCP challenged the tariffs at the Court of International Trade. The judge on that case was Vaden, who sided with the plaintiffs and remanded it back to the International Trade Commission (ITC) to reexamine its calculations.
“The deputy secretary is certainly pushing for those to be removed, both temporary and long term,” a second person familiar with discussions said. “USTR is very much in support of CVDs as a tool to remedy unfair behavior of other actors.”
There were hints at these competing approaches during a recent meeting between Vaden, Greer, other cabinet officials and fertilizer industry representatives, the source said.
The conversation wasn’t on the countervailing duties but was instead on how to increase the domestic supply of nitrogen fertilizer. The group was discussing the risks China poses to domestic investments and concerns that Beijing could flood the market at any time, cratering prices and making new fertilizer projects economically unviable.
Greer, according to the source, pointed out that this is precisely why the U.S. maintains a robust countervailing duty regime.
“That's probably a taste of the discussion that's being had,” the source added.
The Office of the USTR told Agri-Pulse in a statement after this story was published that "Ambassador Greer has assiduously adhered to all relevant ethical standards for executive branch employees, as well as all relevant D.C. Bar Rules of Professional Conduct, when dealing with matters involving former clients throughout his tenure."
They added that "Pursuant to D.C. Bar Rule of Professional Conduct 1.9, Ambassador Greer has recused himself from all Trump Administration discussions on countervailing duties (CVDs) orders on Russian and Moroccan phosphate fertilizer imports."
A USDA spokesperson, meanwhile, said that Vaden does not need to recuse himself from discussions because a Court of International Trade judge is still a federal official.
"He was, and still is, a Federal employee," the spokesperson said in an email. "Accordingly, as a Federal employee at all relevant times regarding this matter, there is no conflict of interest, and the Federal Ethics rules allow full participation in the current policy discussions concerning countervailing duties in this matter."
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Agriculture groups have been urging the administration to lift the duties to ease fertilizer price pressures. The tariffs are up for a five-year review, and many had been hoping that the fertilizer companies would follow Nutrien’s lead and tell the ITC that the duties are no longer necessary to protect the domestic industry.
Mosaic and Simplot, however, dashed those hopes when they filed documents last month in support of keeping the duties.
Phosphate fertilizer is typically applied in the U.S. corn belt in the fall, and there are several scenarios under which the duties are lifted.
USDA and others are continuing to pressure Mosaic and Simplot to lift their support for tariffs as part of the sunset review. Without a petitioner to support the duties, they would automatically be lifted.
Agri-Pulse reported last month that the administration has been considering pausing the duties. President Joe Biden took a similar step on CVDs applied to solar panels from southeast Asia during his presidency. But the Court of International Trade later ruled that the decision was illegal, calling the order an “abuse of discretion.”
When Agri-Pulse asked Vaden earlier this month if the administration could lift the duties without going through the sunset review process, he deferred to USTR.
“That's ultimately a question for the trade representative and the counsel's office,” he said on the sidelines of an event hosted by NOTUS. “I don't want to constrain their ability to look at the options that may be available.”
The sunset review could also result in the duties being nixed.
For the tariffs to continue, the ITC needs to find evidence that they are necessary to prevent injury, or the threat of injury, to domestic industries. Commerce also needs to find evidence of continued subsidies.
“The executive branch has, and exercises, a lot of discretion in determining whether there is material injury to the domestic industry,” said Nazak Nikakhtar, a partner at law firm Wiley.
Accordingly, if the administration decided that it wanted to lift the duties, it could ensure that the review leads to the desired response.
Among other things, the ITC looks at import volumes to determine injury. Imports from Morocco collapsed after the tariffs were imposed and OCP left the U.S. market, which could play out in OCP’s favor in the review.
“The analysis is very complex, which gives the administration a lot of leeway,” said Nikakhtar, who was an assistant secretary in the Commerce Department during Trump’s first term.
This story has been updated to include a statement from the Office of the USTR sent after publication.
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