Gregg Doud negotiated the China Phase One deal during the first Trump administration, which means he knows exactly how U.S.-China ag trade works when it’s working — and how badly it breaks when communication stops.
So, when President Donald Trump and President Xi Jinping sat down last week and hammered out a $30 billion trade framework, Doud — now president and CEO of the National Milk Producers Federation — had a take that might surprise some free-market purists.
“Is this managed trade and transactional business between the U.S. and China? Yeah, it kind of is,” Doud told AgriTalk’s Chip Flory at World Dairy Expo. “But here’s my point based upon my experience: I think we’re better off here. I think having this relationship and doing things this way, the U.S. is going to be better off than being exposed to the vagaries of supply and demand in the marketplace.”
When dealing with China’s government-controlled economy — especially one that’s currently “a disaster,” as Doud bluntly puts it — having direct lines of communication and managed agreements beats hoping the market will sort itself out. For U.S. dairy, which exported a record $9.5 billion in 2025 and is on track for $10.5 billion in 2026, that communication channel matters a lot.
What The Trump-Xi Deal Actually Does
Doud lays out what he understands happened in the recent Trump-Xi meeting: $30 billion of Chinese goods coming to the U.S. and $30 billion of U.S. goods going to China, with both moving back to Most-Favored Nation (MFN) tariff rates.
The agriculture piece is where it gets interesting. Soybeans are exempt from the framework because there’s already a separate deal in place, with a 10% tariff and the Chinese government buying directly. Everything else in agriculture — including all dairy products — is included in the $30 billion framework.
“Everything but soybeans in agriculture will be in that category,” Doud explains. “Soybeans is its own thing. Ag is everything else.”
For dairy, that means cheese, whey, milk powders and other products are part of the managed trade framework, with direct government-to-government communication when issues arise.
Why Doud Thinks Managed Trade Works Better
Doud didn’t sugarcoat his assessment of China’s economic health, stating flatly that “the Chinese economy is a disaster.” He points to shrinking population numbers, stagnant per-capita incomes and an economy that’s fundamentally unhealthy. His evidence? “Look at pork prices. Look at all commodity prices. They’re all down at their basement levels in China.”
The implication is clear: You can’t rely on normal market forces in an economy that’s contracting, government-controlled and struggling. Hoping Chinese demand will naturally absorb U.S. dairy exports is wishful thinking when the fundamentals are this weak.
Doud acknowledges the competitive reality, noting, “We have to compete with the Brazilians; we’ve got to compete with all these different folks here.” But he argues that having a managed relationship with direct government agreements creates predictability that market forces alone can’t provide.
Direct government agreements create clear expectations, and when problems arise, there’s an established channel to fix them quickly. The alternative is competing in a dysfunctional Chinese market against Brazil, New Zealand and the European Union with no ability to quickly resolve issues when shipments get held up or regulations suddenly change.
How It Worked During Phase One — And Why It Broke
Doud speaks from experience, having been the chief ag negotiator during the first Trump administration and the person making the actual phone calls to China when things went wrong.
During the Phase One period, Doud and his team were talking with Chinese counterparts every single day. After the deal was signed, inevitable problems would crop up — boats would get hung up at ports, containers of strawberries would face sudden delays. When that happened, Doud would call his Chinese contacts and say, “Hey, you got somebody at the port doing something they shouldn’t be doing. Can you fix this?”
The result was remarkably effective: Chinese officials would call back a day or two later asking, “Is it fixed? Because we think we fixed it.” And they would have actually resolved the problem. That’s the power of having an established relationship with direct lines to decision-makers: real-time problem-solving with issues resolved in days rather than months.
Then the relationship broke.
“We had a great relationship going on there,” Doud says. “And then we changed administrations.” What happened under the Biden administration was a complete breakdown: For four years, there was not a single conversation between U.S. ag trade officials and their Chinese counterparts.
Doud doesn’t mince words about responsibility, stating plainly that “this is our fault, the U.S.’s fault, for botching the relationship. We had it going.”
From the Chinese perspective, the American approach must seem baffling — the U.S. builds a relationship, achieves results, then completely disappears for four years before coming back. As Doud notes, the Chinese are “pretty baffled by ‘What are you guys doing? Why are you in and out and in and out?’ They don’t have that with any other country.”
The lesson is clear: China wants stability and predictability in its trading relationships, while the U.S. political system creates whiplash with every administration change. Managed trade frameworks with direct communication channels help bridge that gap.
Why This Matters for Dairy
The explosive growth of U.S. dairy exports provides crucial context for understanding why Doud thinks the managed trade approach is so important. Back in 1995, the U.S. exported just 2% to 3% of its milk production. By 2025, that figure had jumped to 17% of production, with export value hitting a record $9.5 billion. Dairy is now the second-largest U.S. ag export after corn and soybeans.
China has historically been a major buyer of whey products (especially for infant formula), milk powders, lactose and, increasingly, cheese. The problem is that China can shut down imports overnight with regulatory changes, port delays or sudden “quality concerns.”
The managed trade framework offers four key advantages. First, it creates predictability through framework agreements where both sides know what’s expected. Second, it establishes direct communication channels for problem resolution, allowing issues to be resolved in days rather than months. Third, it provides protection from market dysfunction in an economy where government buying provides stability the market can’t. Fourth, it creates a competitive advantage when Brazil, New Zealand, the EU and Australia are all competing for the same market; U.S. government backing gives American dairy an edge.
The Pragmatic View
Free-market advocates might argue that managed trade distorts markets and that government shouldn’t be picking winners. Doud’s response, while implied rather than stated directly, rests on a pragmatic foundation: That worldview works when you’re dealing with functioning free markets, but China’s economy isn’t a functioning free market — it’s government-controlled, struggling and unpredictable.
You play the game that exists, not the game you wish existed. China operates through government-to-government agreements as a matter of course, and U.S. dairy can either engage on those terms or risk getting shut out of a market that represents billions in export value.
The Bottom Line
Doud has been in Washington, D.C., for 35 years, he negotiated the China Phase One deal, and he knows how U.S.-China ag trade works when it’s actually working. His message to dairy farmers is pragmatic rather than ideological: Managed trade with China isn’t the free-market ideal, but it’s better than the alternative.
The reasons are straightforward: China’s economy is broken, market forces aren’t reliable in that environment, direct communication solves problems that markets can’t and predictability beats chaos when you’re trying to build a sustainable export business.
The proof already exists: This approach worked during Phase One, then it broke completely when communication stopped under the Biden administration, and now it’s being rebuilt with the Trump-Xi framework. For U.S. dairy exporting $10.5 billion annually with 17% of production going overseas, that communication channel isn’t a nice-to-have luxury — it’s essential.
“We’ve got to get the wheels back on the wagon,” Doud says, summing up both the challenge and the opportunity. “I think this is the best way to do it.”
