Agricultural trade is a tool for growth, not a weapon of diplomacy, said Senate Agriculture chairman Pat Roberts in warning that U.S. tariffs against trade partners are endangering America’s reputation as a reliable source of food. During a speech to a trade group, Roberts said, “There is a danger we will be left behind” in the race for sales on the world market.
“I have voiced my concern time and time again that tariffs placed on our trading partners pose a significant threat to the international markets upon which our economy relies,” said Roberts to the Washington International Trade Association (WITA). “We have seen those threats realized over the past several weeks — notably exports of soybeans and meat to China. And the problem is only growing as other trading partners follow suit.”
Exports generate 20 cents of each $1 in farm income. The four largest markets for U.S. farm and food exports — China, Canada, Mexico, and the European Union — imposed steep tariffs on U.S. products, including ag and food goods, in response to U.S. tariffs on their exports. China is the main target.
Agriculture Secretary Sonny Perdue, who spoke to WITA, said the administration is using tariffs as leverage against abusive Chinese trade practices. “It’s a little bit painful in the meantime,” he said in a broadcast interview earlier in the week. “I applaud President Trump for calling their hand.”
Hog and dairy farmers will see lower average prices in coming months, in part due to retaliatory tariffs, said the USDA’s monthly Livestock, Dairy, and Poultry Outlook. The report forecast that slaughter hogs would sell for 16 percent less per pound in the second half of this year compared with the same period in 2017 in response to large supplies “and the impacts of tariffs on export competitiveness.” USDA analysts pared the forecast of the average “all milk” price this year by 4 percent from their estimate before the tariffs took effect.
Also, the USDA forecast last week that soybean growers would lose a quarter-billion bushels of exports in 2018/19 because of tariffs imposed by China, the largest customer for the oilseed.
An array of U.S. farm products, including soybeans, wheat, beef, pork, poultry, corn, sorghum, cotton, fruits, and nuts, face cumulative Chinese tariffs of 40 to 50 percent, farmers told a House Ways and Means subcommittee. Cass Gebbers, a large-scale fruit and cattle producer in Washington State, said China had also implemented stringent inspection policies that held cargoes for days or weeks and effectively shut down trade. “The risk was simply too great to continue to ship,” said Gebbers.
“I am hearing more from farmers as time goes along that they still trust that President Trump knows what he’s doing and everything will be fine in the end,” said Scot VanderWal, a South Dakota farmer and cattle feeder who is vice president of the American Farm Bureau Federation. Nonetheless, patience is wearing thin as harvest time approaches. “We must ask, what is the exact goal?” said VanderWal. “What is the exit strategy? If we knew this would all be over in a few months, we could hang in there and manage around it.”
To watch a video of the Ways and Means hearing or to read the testimony of witnesses, click here.