Exports artwork Bet_Noire/iStock-GettyImages

Tariffs: ‘Serious damage to U.S. farmers…’

"We should seek free and fair trade, but this is just not the way to do it."—Tom Donahue, U.S. Chamber of Commerce

Politics makes strange bedfellows, the old adage goes, but it seems the long-standing love fest between the U.S. Chamber of Commerce and the Republican Party has developed something of a lump in the mattress when it comes to President Trump and tariffs.
 
The Chamber, a non-profit group that can accept unlimited contributions and doesn’t have to disclose donors, has little association with or relevance to local chamber organizations around the country. It spent $103.9 million on lobbying in 2016, far outdistancing all corporations or industry associations. Public Citizen reports that nearly $30 million was spent on U.S. House and Senate races, $13.1 million to support Republican candidates, $16.5 million to oppose Democrat candidates. It is well-known for attack ads against those it opposes.
 
The Chamber was not on Trump’s bandwagon in the 2016 campaign, nor is it now supporting the trade skirmishes between the U.S. in its skirmishes with its major trading partners: China, Mexico, Canada, and Europe.
 
"The administration is threatening to undermine the economic progress it worked so hard to achieve," Chamber President Tom Donohue said in a statement to the Reuters news agency. "We should seek free and fair trade, but this is just not the way to do it."

suriyasilsaksom/iStock, Getty ImagesExports art 2

In a statement coinciding with the start of its opposition campaign, the Chamber noted: “Tariffs imposed by the United States are nothing more than a tax increase on American consumers and businesses — including manufacturers, farmers, and technology companies — who will pay more for commonly used products and materials. Retaliatory tariffs imposed by other countries on U.S. exports will make American-made goods more expensive, resulting in lost sales and ultimately lost jobs here at home. This is the wrong approach, and it threatens to derail our nation’s recent economic resurgence.”
 
The Chamber released a state-by-state breakdown of the impact the tariffs will have. In the Mid-South:
 
•Mississippi — $519 million of exports threatened: $99 million to Canada; $181 million to Mexico; $229 million to China; $10 million to Europe; 339,500 jobs are supported by international trade.
•Louisiana — $5.9 billion of exports: $120 million to Canada; $7.2 million to Mexico; $5.75 billion to China; $87 million to Europe; 553,200 jobs supported by international trade.
•Tennessee, $1.4 billion of exports: $483 million to Canada; $86 million to Mexico; $314 million to China; $508 million to Europe; 857,000 jobs supported by international trade.
•Arkansas — $339 million of exports: $225 million to Canada; $93 million to Mexico; $15 million to China; $5.5 million to Europe; 348,400 jobs supported by international trade.
•Missouri — $881 million of exports: $432 million to Canada; $72 million to Mexico; $138 million to China; $239 million to Europe; 826,700 jobs supported by international trade.
 
The agriculture sector has been foremost in taking it on the chin economically from the tariffs. Soybeans, with $14 billion in exports in 2017, representing 41 percent of the value of products on China’s tariff hit list, dropped to a low of $8.40 per bushel July 6, well below most farmer’s cost of production.
 
“Soybeans are the top agriculture export for the United States, and China is the top market for purchasing those exports,” says John Heisdorffer, a soybean grower from Keota, Iowa, and president of the American Soybean Association. “Soybean farmers, whose crop represents 41 percent f the value of products on China’s tariffs list, will feel the full effect.”

After months of petitioning the Trump Administration for an alternative to tariffs, soybean growers’ pleas went unanswered, the ASA says. “The math is simple,” says Heisdorffer. “You tax soybean exports at 25-percent, and you have serious damage to U.S. farmers.” 

stevanovicigor/iStock, Getty imagesSoybeans at sunrise

In 2017, China imported 31 percent of U.S. production, equal to 60 percent of total U.S exports, the ASA notes, and nearly one in every three rows of harvested beans went to China. Over the next 10 years, Chinese demand for soybeans is expected to account for most of the growth in global soybean trade, underscoring the importance of this market for future U.S. soybean sales.

In a July 11 statement the soybean grower organization expressed “extreme disappointment” at the U.S. Trade Representative’s announcement that an additional $200 billion in tariffs will be imposed on Chinese goods. “This action worsens the trade dispute between the U.S. and China,” the statement said.

“While trade tensions with U.S. soy’s largest customer continue to escalate,” said ASA President Heisdorffer, “soy growers from across 30 states are in Washington, talking with the members of the administration and Congress, urging them to rescind these tariffs and bring a sense of stability and certainty back to farmers who depend on trade.

“The announcement of additional tariffs on China is a move in the opposite direction. We’re focused on increasing trade opportunities and keeping the robust and growing Chinese market we have worked for decades to secure. Our message to the administration and lawmakers remains the same: these tariffs needlessly hurt soy growers and rural communities.

The American Soybean Association continues, Heisdorffer said, to encourage the Trump administration to find a non-tariff solution to address its concerns with China, while also utilizing soy as the largest agricultural export to help reduce the U.S. trade deficit with China.
 
"While other sectors of the U.S. economy are surging, the farm economy is facing adversity from many angles, such as low commodity prices and income, rising interest rates, record debt and poorer loan performance," the American Farm Bureau Federation said in a recent statement. "One factor that will certainly help to improve the farm economy, and is in the best interest of U.S. agriculture, is a timely and successful resolution of these trade disagreements."

TAGS: Business
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish