Democrats and Republicans on the Senate Agriculture Committee were united today in their demands that the Trump administration settle its trade battles around the world and start forging new free trade agreements.
Chinese, Mexican and other retaliatory tariffs are hurting America’s farmers, who have seen prices and sales drop this year, and lawmakers stressed a growing impatience.
“We need to hold our trading partners accountable, but I am concerned some of the trade actions we have seen in recent years are causing uncertainty and unpredictability for the agriculture industry,” Chairman Pat Roberts, R-Kan., told USTR Chief Agriculture Negotiator Gregg Doud, Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney and USDA Chief Economist Robert Johansson at the Wednesday hearing.
Mexico, Canada, the European Union, China, and others have all hit the U.S. in recent months with agriculture tariffs in response to the Trump administration's import taxes on steel and aluminum. Separately, the U.S. hit China with tariffs on $50 billion worth of goods to punish it for intellectual property theft. The Chinese hit back with a 25 percent tax on U.S. soybeans, sorghum, corn, wheat, cotton, fruits, vegetables and tree nuts.
Sen. John Boozman, R-Ark, noted that the farmers in his state are understanding of the Trump administration’s battles with China, but are also anxious for U.S. negotiators to “wrap this up as soon as possible.”
Doud made an impassioned plea for understanding that China needs to be taken to task for its transgressions against the U.S., stressing the country's refusal to buy the wheat, corn and rice that it promised when it joined the World Trade Organization, as well as U.S. opposition to China’s domestic subsidies.
But those trade battles are playing out in the WTO. It’s the Trump administration’s metal tariffs and battle against intellectual property theft that spurred retaliatory tariffs.
“The point being with China is that they need to change their behavior and this is going on not just in agriculture, but in other things and … (President Donald Trump) said we need to do something about this,” Doud said.
That prompted a sharp response from Sen. Michael Bennet, D-Colo.
“I don’t need a lecture on that,” he said. “That is my view, but it would seem to me that provoking a trade war with Mexico, Canada and the EU when the issue fundamentally is with China – and when the growth for all our farmers and ranchers in the West is going to come from the Pacific Rim – seems insane.”
While the Trump administration primarily sought to stop China from over-producing steel and aluminum, it levied tariffs on Mexico, Canada, Europe and other allies too. Mexico, Canada and Europe all hit back with tariffs on U.S. agricultural goods.
McKinney sought to assure the lawmakers that the trade battles would essentially be “short-term pain in return for long-term gain,” but Sen. Joe Donnelly, D-Ind., took exception to that. The trade wars, he said, have depressed prices so badly that many Indiana farmers would not be able to get operating loans to plant next year’s crop.
National Association of Wheat Growers President Jimmie Musick said in a statement today that while his group supports the administration’s WTO suits against China, the tariff battles are troubling.
“We see opportunity for our members from the strong resistance to China’s unfair trade policies,” he said. “We also recognize the risk to farm income continues to grow the longer this confrontation with China continues, and we call on the Administration to do all it can to resolve the dispute as quickly as possible.”
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Meanwhile, Senate Agriculture Committee members also stressed their concerns that the Trump administration was not moving fast enough to enter into new free trade agreements with countries in order to improve international markets for U.S. farm commodities.
Sens. Steve Daines, R-Mont., John Thune, R-S.D., Roberts and others expressed deep frustration that the U.S. was still not willing to rejoin the Trans-Pacific Partnership, an 11-member Pacific Rim trade pact that includes Japan.
One of the first things that Trump did after taking office in January last year was pull the U.S. out of the TPP.
The American Farm Bureau Federation had predicted that tariff cuts and other measures in the TPP would net farmers an extra $4.4 billion annually, and the National Cattlemen’s Beef Association was counting on the pact to help it compete with Australia for Japan’s massive beef demand.
“It seems that if you want to send a message to China, the best way to do that is to do business with their competitors,” Thune said, and then asked Doud if there was a possibility of rejoining TPP or at least conducting a free trade agreement with Japan.
Doud did not offer an opinion on the odds of rejoining TPP, but stressed repeatedly that USTR is trying to convince Japan to enter into a bilateral pact with the U.S.
“Japan would like us to be part of TPP, but we’re committed to engaging with them … and we’re going to get there at some point,” Doud said. “Let me assure you that we at USTR completely agree. There isn’t anyone in the building that doesn’t want to do a trade agreement with Japan.”
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