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A building pace toward trade war only hurts U.S. ag

Published on 25 June 2018

The plot is thickening in regard to foreign trade policy in the U.S., and farmers and ranchers have already had their fill of tension.

It’s a justified concern given the almost daily barrage of news indicating what could be a trade war between the U.S. and China, or Mexico, or Canada, or Europe, or … well, let’s just hope it doesn’t go any further than that.

This spring, President Trump announced a tariff on aluminum and steel on several countries, primarily China among them. China retaliated with its own list. A second wave then was set off by Trump, with a proposal for more tariffs on 1,300 Chinese product lines valued at $50 billion.

China struck back with its own proposal worth $50 billion on items that included soybeans and beef. Again, Trump suggested going even higher, to $100 billion in tariffs. From there, a stalemate ensued.

Is this all hardball or a game of bluff? Hard to say. But for many Americans, getting tougher with China is a bit overdue. Politicians have long accused the Chinese of undervaluing their currency, and the open market that exists in China has led the U.S. to sometimes give too much.

But the strategy grew more tense this month, as Trump heightened talk of ditching the North American Free Trade Agreement (NAFTA) altogether, as talks have stalled with Canada and Mexico.

“Farmers have not been doing well for 15 years. Mexico, Canada, China and others have treated them unfairly. By the time I finish trade talks, that will change. Big trade barriers against U.S. farmers, and other businesses, will finally be broken. Massive trade deficits no longer!” said Trump in a June tweet.

Many farming and ranching groups are balking at that insinuation. Messing with China is one thing; messing with our neighbors is a whole new risk. (See this month’s 2018 Beef Stats poster inside this issue for more insight into U.S. exports.)

Usually our online polls with Progressive Cattleman readers gather lukewarm interest. Not this year. The figure on this page shows most respondents placing high value on NAFTA trade; the largest response said both Canada and Mexico were critical.

NAFTA trade reader poll

That doesn’t mean farmers and ranchers haven’t seen negative impacts from NAFTA or other trade deals. Indeed, the deal has pushed some producers into a tighter position with outside beef imports.

But the industry at large still finds these deals worthy to keep while pursuing new deals and new partners.

Ag Secretary Sonny Perdue even told farmers in Kansas he’s hoping Trump can be persuaded to get back in the Trans-Pacific Partnership, with its pluses for ag exports, he told the Wichita Eagle.

The president, with his penchant for the headlines, has to push American interests, but he also has to see the truth and reality that the majority of ag interests want more markets. And they don’t want to see a full-fledged trade war. end mark

David Cooper
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