The White House ought to be expanding agriculture export markets rather than disrupting relations with leading trade partners, said farm-state senators during a hearing with Agriculture Secretary Sonny Perdue on Tuesday. Sales to the three largest export markets—China, Canada and Mexico—are at risk, with China threatening steep tariffs on billions of dollars of farm imports.
“In some cases, we are using farmers and ranchers as a pawn” for the goal of face-to-face negotiations to reform Chinese practices, said Senate Agriculture chairman Pat Roberts. While China has threatened but not imposed tariffs on U.S. soybeans, corn, wheat, cotton, beef, pork, fruit and orange juice, it announced 179 percent anti-dumping deposits on U.S. sorghum in mid-April. The United States is the world’s leading sorghum exporter and China is the largest importer.
“Farmers have a right to be legitimately anxious,” responded Perdue, who said President Trump’s unorthodox negotiating style, which included vows of counter-tariffs on China, would bring Beijing to the negotiating table, allowing a peaceful conclusion. “[A trade war] is not what the president wants. He wants them to play fair.”
So far, the administration has been purposely vague about how it will protect farmers from Chinese retaliation or when it would act. Sorghum is in a different class, said Perdue, because of the anti-dumping deposits. The sorghum trade is worth nearly $1 billion a year. China is forecast to buy $21.6 billion of U.S. agriculture and food exports this year. It would account for roughly $1 of every $6 of exports.
“We are meeting with the sorghum people to determine what are the longer-term effects,” said Perdue. The administration wants aid to be based on permanent change in sales patterns and not short-term gyrations in market prices. “We don’t want to set the precedent,” said Perdue, of over-compensation for short-lived events.
South Dakota Sen. John Thune, No. 3 in GOP Senate leadership, opposed ad hoc payments to compensate producers for trade losses. “We urgently need new, well-crafted trade agreements to expand markets,” said Thune. Roberts used similar words at the start of the hearing, saying U.S. trade policy should “grow and strengthen markets all around the world.”
At least nine other senators mentioned agricultural trade in questioning Perdue. North Dakota Democrat Heidi Heitkamp said Trump’s withdrawal from the Trans-Pacific Partnership, frequent threats to scrap NAFTA while it is under renegotiation, and nose-to-nose threats of tens of billions of dollars of tariffs on Chinese products showed “a trend of trade disruptions and retreat.”
Perdue acknowledged, in response to questions from Heitkamp and New York Democrat Kirsten Gillibrand, that the new NAFTA might not include the U.S. goal of eliminating Canada’s supply management system for dairy, poultry, and eggs. “I am concerned about that as well,” he said.
After the hearing, Roberts said the administration promise of aid to farmers was “rather amorphous” and could total $15 billion through the USDA’s broadly written powers to support commodities and producers. “If we had $15 billion, we could use it for the farm bill,” said Roberts. “What we need here is trade.”
The Agriculture Committee hearing was lightly attended, a rarity considering the lead witness was a cabinet secretary and the hearing was in the middle of a farm bill year. Usually, such a hearing would attract dozens of lobbyists and onlookers. On Tuesday, there were six empty seats among the 30 reserved for members of the public.
To watch a video of the hearing, click here.