Farm group leaders and lawmakers railed against President Donald Trump’s trade policy and tariffs in a House Ways and Means subcommittee hearing today, bemoaning the effects on the ag sector as China, Mexico, Canada, the European Union, Turkey and others retaliate.
“Most of our agriculture producers today rely heavily on export markets, and, unfortunately, many of these farmers and producers are now facing the loss of not just one of their top international export markets, but their top two, three, four export markets – all at once,” said the panel's chairman, Dave Reichert, R-Wash. “They are facing severe and devastating uncertainty – and that goes right to their profitability.”
The Trump administration is waging trade battles on several fronts, including tariffs on China to try to get the country to stop stealing intellectual property and to agree to measures that would decrease its trade surplus with the U.S. The U.S. has slapped billions of dollars of tariffs on steel and aluminum imports from China, the European Union, Mexico, Canada, Turkey, India and Russia. All of these countries are retaliating with tariffs of their own and many of those import taxes are directly aimed at U.S. ag exports.
Scott VanderWal, president of the South Dakota Farm Bureau and one of six witnesses at the hearing, stressed that farmers are already losing money because of the tariffs that could put many producers out of business if the trade wars are not over soon.
“We must ask, what is the exact goal?” VanderWal testified. “What is the exit strategy? If we knew this would all be over within a few months, we could hang in there and manage around it. Obviously, none of us know the time frame and that uncertainty is very detrimental … We must get back to the table and get these issues worked out. If we cannot do that, the consequences are dire.”
Soybean futures prices have been dropping sharply since early June and hog prices have been falling longer than that, said Minnesota Farm Bureau President Kevin Paap, who said much of the losses that farmers and ranchers cannot afford are due to the tariffs.
Pork was just one of the U.S. commodities that Mexico hit with a tariff to retaliate against the steel and aluminum import taxes. At first it was a 10 percent tariff, but that was doubled on June 5.
China levied a 25 percent tariff on U.S. soybeans and a long list of other products that range from cherries to wine to asparagus on July 6. Those tariffs were in response to the Trump administration’s tariffs on $34 billion worth of Chinese products. The U.S. is now preparing to hit China with new tariffs on $200 billion worth of goods.
When it comes to soybeans, Brazil has benefited from U.S. pain, said Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities and a witness at the hearing.
“Already, prices for U.S. soybeans, one of our main agricultural exports, have fallen sharply, while prices in Brazil, our main competitor for global market share in soybean exports, have climbed equally sharply,” he said.
While many of the lawmakers at the hearing were critical of the tariffs, there was support from members including Republicans Tom Rice of South Carolina and Jason Smith of Missouri.
Rice urged the farmers who comprised most of the witness panel to “understand the big picture,” stressing that President Trump needs free rein to go after China and other countries with tariffs.
“The end result here is to try to get a better playing field for you guys, and I feel your pain and want to do anything I can to make it speedy and ameliorate it,” Ride added. “We all have to understand that in order for any of this to happen, the administration is doing what I think they have to do in bringing pressure to bear to bring these people to the table.”
The witnesses, meanwhile, stressed to lawmakers that after they lose customers, whether in Mexico or China, it's hard to get them back.
“It is critical that we limit trade disruptions and resolve trade disputes through negotiations, not tariffs or withdrawals from other trade agreement discussions. Once you lose a market, it is really hard to get it back,” Paap said.
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