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GOP leaders argue tariffs backlash could hurt farms
 

By RACHEL LANE

WASHINGTON, D.C. — Leadership within the Republican party and from countries around the world have spoken out against tariffs President Trump has ordered on steel and aluminum.

These are the third and fourth tariffs ordered this year, after levies on solar and washing machine imports enacted in January. A week after Trump’s announcement that solar tariffs would be put into place, the Chinese government said it would be investigating the pricing of sorghum and soy products the United States exports.

Rep. Steve King (R-Iowa) told his constituents he opposes Trump’s steel and aluminum tariffs because of what they could do the agricultural market. “It will be the (19)80s all over again,” he said, referencing the farm crisis that put 10,000 Iowa farms out of operation.

USDA Secretary Sonny Perdue said China’s sorghum move was not a retaliatory measure and that countries often investigate the pricing of agricultural products. These investigations occur to make sure the exporting country – in this case, the United States – isn’t providing high subsidies for farmers. These subsidies would allow U.S. sorghum to be sold cheaper than for what China can produce it.

Perdue did also say, though, that agriculture is often one of the first U.S. industries other countries retaliate against.

Iowa members of Congress sent a letter to Trump last week requesting he carefully consider the tariffs’ economic costs and benefits. “We are concerned such a move could set into motion a chain of retaliatory measures, hurting Iowans from the family farm to the family-owned manufacturing plant,” it stated. “Iowans cannot afford a trade war.”

Iowa is the second-largest agricultural export state, shipping about $10 billion in goods abroad in 2015.

“The United States enjoys a large agricultural surplus with China and recently began exporting U.S. beef, which is a good indication of China's interest in expanding agricultural imports,” the letter added. “As farmers have already faced several years of low commodity prices, any hit to demand would be devastating to their financial situations."

Iowa exports corn and pork to China as well as about 60 percent of its soybeans. The American Soybean Assoc. (ASA) said China is the largest customer of U.S. soybeans as well, purchasing more than all other countries combined. It accounts for about $14 billion in sales – more than a third of U.S. production.

“The tariffs announced today by the administration will put the interests of other domestic industries over farmers,” said John Heisdorffer, ASA president and Iowa grower. “Prior to today’s announcement, China has indicated that it may retaliate against U.S. soybean imports, which would be devastating to U.S. soy growers.

“Our competitors in Brazil and Argentina are all too happy to pick up supplying the Chinese market.”

He said commodity prices are already down 40 percent and farm income is down 50 percent from their peak a few years ago. Farmers can’t afford for those numbers to get worse. In addition, the tariffs on steel and aluminum will directly impact farmers, as the ag industry uses products made from these to operate farms.

Canada, Mexico excepted

Last week’s announced tariffs will add an import levy of 25 percent on steel and 10 percent on aluminum before the end of March. Canada and Mexico have been given special exemption while the North American Free Trade Agreement is being renegotiated. Trump said other U.S. allies may also be given exemptions if agreements can be reached.

“Like we have seen in the past, American agriculture often pays the price. We need a trade policy that is stable and beneficial to all industries,” said Sen. Pat Roberts (R-Kan.), chair of the Senate Agriculture, Nutrition and Forestry Committee.

He said farmers need to export and he is concerned about other countries retaliating against farm products. In addition, he noted the tariffs’ cost will be passed on to U.S. consumers. “I don’t like tariffs. The President knows exactly where we stand.”

A letter from 107 Republican lawmakers asked Trump to reconsider his plans. It states tariffs are taxes that make U.S. businesses less competitive, and any tariff should be constructed in a way to minimize impact on business and consumers.

European Union Trade Commissioner Cecilia Malmstrom tweeted that the EU should be excluded from the tariffs. She is expected to meet with U.S. Trade Representative Robert Lighthizer soon.

She said the EU has a list of U.S. goods that would see high tariffs in Europe if Trump’s plans move forward. She named specifically peanut butter, cranberries and orange juice. EU Commission President Jean-Claude Juncker added imports of Levi’s jeans, bourbon and Harley-Davidson motorcycles to the list of items likely to be levied.

Japanese Foreign Minister Taro Kono called the decision regrettable and predicted it could have an impact on the relationship between the U.S. and Japan, and on the global economy.

Trump signed the tariffs order Thursday – the same day officials from 11 Pacific Rim countries signed the trade agreement that came together after the U.S. pulled out of the Trans-Pacific Partnership a year ago. The newly-named Comprehensive and Progressive Agreement for Trans-Pacific Partnership will drop tariffs drastically and establish new trade rules in markets that represent about one-seventh of the world’s economy.

“Only free trade will contribute to inclusive growth of the world economy,” Kono said. “Protectionism isn’t a solution.”

3/14/2018