President Trump is a maverick when it comes to international relations, said Agriculture Secretary Sonny Perdue on Wednesday while assuring farm-state senators that successful negotiations would resolve the threat of a trade war. “I know that you and I would not use the same negotiating style that President Trump does,” responded Perdue when Montana Democrat Jon Tester warned, “We’ve got a big problem here.”
Tester was among half a dozen members of a Senate Appropriations subcommittee to ask Perdue about the outlook for the farm economy in light of Chinese threats to impose 25 percent tariffs on U.S. soybeans, corn, wheat, cotton, sorghum, beef, and orange juice, as well as tobacco and whiskey. The duties would counter $50 billion in proposed U.S. tariffs on Chinese high-technology exports that the White House says would punish China for the theft of intellectual property.
“Our first goal is to negotiate ourselves out of the saber rattling that has occurred and make sure these market disruptions don’t have a permanent impact,” replied Perdue when Sen. Tammy Baldwin said Wisconsin farmers are worried that tariff threats will turn into reality and reduce farm income. Exports account for 20 percent of U.S. farm income, and China is the largest customer for U.S. food and ag shipments.
The administration plan is to wrap up negotiations on the new NAFTA and then turn its full attention to talks with China, said Perdue. “We are expecting an agreement on NAFTA,” he said, although he conceded that “I am not as optimistic as I would like to be” that the pact will eliminate Canada’s supply management system for dairy, poultry, and eggs. U.S. farm groups say Canada’s restrictions on imports block them from a lucrative market, and removal of supply management has been a top U.S. ag goal at NAFTA.
Perdue reiterated Trump’s promise that farmers and ranchers would be shielded from Chinese retaliation. “I don’t think, again, it pays us to lay all our cards on the table,” he told reporters who asked how much the USDA could spend to help farmers and in what form. “At this point, we are in a negotiating stage … we are not in a mitigation stage.”
Perdue has greater leeway than his Obama-era predecessor, Tom Vilsack, to spend emergency funds to support farmers and ranchers because of a provision in the omnibus spending bill that was passed in March. Administration officials began discussions last August or September about tools they could use in trade disputes, Perdue told reporters. One result was the increased discretion to spend so-called Section 32 funds.
China “absolutely” is aware that the USDA has the authority to shield growers, said Perdue, just as it carefully selected agricultural targets for tariffs to hit Trump’s political base. “They know the political landscape of the United States. Ginseng — whose district is that? Could it be [House] Speaker [Paul] Ryan’s?”
By coincidence, Ryan announced on Wednesday that he will retire from the House at the end of this year, his 20th as a representative.
To watch a video of the appropriations hearing or to read Perdue’s written statement, click here.