Farmers across America expressed deep disappointment March 23 over being put in the middle of a potential trade war with China by the president many of them helped elect.
After President Donald Trump announced plans to impose tariffs on products including Chinese steel, Beijing responded with a threat to slap an equal 25 percent charge on U.S. products such as pork and a 15 percent tariff on such things as wine, apples, ethanol and stainless-steel pipe.
American farmers “should be not necessarily infuriated but close to it,” said Wayne Humphreys, who farms corn and soybeans and raises hogs and cattle near Columbus Junction, Iowa. “We’ve invested a lot of time, talent and treasure in developing markets around the world and with the stroke of a pen, that investment has been jeopardized.”
Overall, the nation’s farmers shipped nearly $20 billion of goods to China in 2017. The American pork industry sent $1.1 billion in products, making China the No. 3 market for U.S. pork.
“We sell a lot of pork to China, so higher tariffs on our exports going there will harm our producers and undermine the rural economy,” National Pork Producers Council President Jim Heimerl, a pork producer from Johnstown, Ohio, said in a statement. “No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers.
“When it comes to trade, we expect all countries to follow international rules and to trade fairly. We also expect all countries to resolve trade disputes in a way that doesn’t harm businesses, farmers and consumers.”
The U.S. has complained for years about China’s sharp-elbowed trading practices, accusing it of pirating trade secrets, manipulating its currency, forcing foreign companies to hand over technology and flooding world markets with cheap steel and aluminum that drive down prices and put U.S. manufacturers out of business.
Trade deficit high
The Trump administration March 22 declared the talk approach a failure, noting that the U.S. trade deficit in goods with China last year hit a record $375 billion. In a move to punish Beijing for stealing American technology, the White House set in motion tariffs on up to $60 billion in Chinese imports and restrictions on new Chinese investment in the U.S.
“We’re doing something that will be the start of making trade with China more fair,” Trump said. “Our past presidents should never have allowed this to happen.”
The stakes are high: China is America’s largest trading partner. Last year, the two countries exchanged $636 billion worth of goods and American companies such as Boeing and Caterpillar depend heavily on the Chinese market.
Farmers voted overwhelmingly for Trump in 2016. But now many worry about economic blowback from his combative approach.
“When you start hurting this big segment of the economy from the people that gave him a lot of support in the election, I think it’s going to hurt him. I really do,” said Dave Struthers, who raises pigs, corn, soybeans and hay on a 1,100-acre family farm 30 miles northeast of Des Moines.
He said hog farmers are already struggling to make a profit, with prices below the break-even point, “and any more pressure against that is just going to hurt us that much more.”
“We’re very concerned about what might happen as far as a tariff,” he said.
Some are holding out hope a trade war can be averted and the disputes can be resolved through negotiation.
Sign up for HPJ Insights
Our weekly newsletter delivers the latest news straight to your inbox including breaking news, our exclusive columns and much more.
Sorghum hit first
The National Sorghum Producers said in its weekly email to members March 23, “U.S. sorghum producers are already facing a difficult retaliatory situation as a the first U.S. commodity investigated as part of this larger picture with the anti-dumping and countervailing duty investigations into imports of U.S. sorghum launched by China in February, and National Sorghum Producers and our industry stakeholders remain actively engaged in these cases.
“There is undoubtedly a lot of uncertainty related to trade with China in this current environment, and NSP continues to work to not allow our members to be harmed and will provide information to our growers as it becomes available.”
U.S. Grains Council President and CEO Tom Sleight said in a statement, “While we are not surprised, we are dismayed at new tariffs announced.…by the Trump administration against China, which will almost certainly prompt immediate and painful retaliation against U.S. agriculture which have already complicated our global efforts to promote sales of U.S. grains and grain products.
“The farmers and exporters we represent have been here before in our relationship with China. Since 2010, we have been adversely impacted by trade policy actions by China against U.S. distiller’s dried grains with solubles, sorghum, ethanol and corn. We have supported targeted U.S. government efforts to address these issues but nevertheless remained dedicated to the China market because it holds immense growth potential for U.S. agriculture.
“In the near term, we will continue our work to diversify the markets to which our products are exported, focused on sales that can support prices this crop year. Based on our recent experience, we are well aware this work will be an uphill battle because our reputation as a reliable supplier has come into question.
“In the longer term, U.S. agriculture must have a stable and coherent trade policy to thrive. The world is watching what our country does next—and markets have long memories. Agriculture is a positive contributor to the balance of trade, and the international marketplace offers the best available opportunity for growth in the U.S. agriculture sector and the U.S. economy as a whole.”
U.S. Wheat Associates and the National Association of Wheat Growers said in a joint statement “We agree that unfair Chinese government policies create unnecessary trade distortions that hurt U.S. farmers and other industries. Our organizations urged the U.S. government to challenge China’s domestic price support and tariff rate quota compliance that led to cases disputing these policies within the World Trade Organization.
“Such cases served notice to China and our trading partners that the United States would lead a legitimate effort to enforce existing trade rules—by following those rules. We believe that it is in the nation’s best interests, and the interests of the wheat farmers we represent, to challenge trade-distorting policies to the maximum extent possible within WTO rules.
“It is unfortunate that the well-intentioned decision to challenge other Chinese trade policies has been implemented in a way that violates the rules outlined in Article II of the GATT Agreement. Recent actions including withdrawal from the Trans-Pacific Partnership and implementing steel and aluminum tariffs on the basis of national security have already undermined U.S. leadership in international trade. Now this action further erodes historical support for rules-based trade policies, even though China will likely bring a case against the tariffs within the WTO dispute settlement process.”
David Pitt and Steve Karnowski of The Associated Press contributed to this report.
Larry Dreiling can be reached at 785-628-1117 or [email protected].
