Two years ago, President Trump declared on social media that he was “a Tariff Man” and that import duties “will always be the best way to max out our economic power,” a sentiment that was widely disputed. Senate Finance Committee chairman Chuck Grassley said on Tuesday that Trump was right when it comes to China.
“I think we’re getting successful negotiations because of the tariffs,” Grassley told farm broadcasters after a reporter noted that most tariffs, including retaliatory tariffs by China, will remain in place under the “phase one” agreement awaiting signature by U.S. and Chinese officials. China is “legitimately negotiating” with more talks to come, said Grassley. “I’d have to say three years ago I thought Trump was crazy for imposing them. But now he’s doing something that no other president has done on Chinese cheating. And I think everybody applauds the president for bringing it.”
Grassley is from Iowa, a leading farm state. U.S. ag exports are down since 2018 due in part to the China-U.S. trade war. As of Monday, the Trump administration has sent $10.8 billion to producers through the stop-gap Market Facilitation Program to offset the impact of the trade war. Iowa, Illinois, Texas, Minnesota and Kansas are the leading states for payments.
U.S. farmers are becoming more confident “that the soybean trade dispute with China will be settled soon,” according to the monthly Ag Economy Barometer. Soybeans were one of China’s major targets for retaliatory tariffs when the trade war deepened in 2018. Some 54 percent of farmers and ranchers participating in a Purdue University poll said they believed a settlement was likely. Optimism has been on the rise since July, when 22 percent believed there would be a settlement soon.
The “phase one” China-U.S. agreement calls on China to buy huge amounts of American farm exports — as much as $50 billion a year, according to administration officials. Details of the agreement have not been released. Grassley said he expected they would become public “immediately after it’s signed.”