Farm organizations have begun mounting a full court press to educate the new administration about the importance of trade to the farm economy.
The effort follows reports President Trump would impose a 20-percent tariff on imports from Mexico, the No. 1 export market for U.S. corn, dairy, pork and rice shipments and the No. 2 and No. 3 markets for soybeans and upland cotton.
The 20-percent tariff would be used to build the much-talked-about wall along the U.S.-Mexico border (even though more illegal aliens are now leaving the U.S. than entering the country, according to most reports) and make Mexico pay for it.
A letter sent by 130 food and agriculture groups about another trade issue - the new administration’s possible withdrawal from the North American Free Trade Agreement -- was relatively sanguine. It noted how U.S. agriculture “relies heavily on export markets to sustain prices and revenues,” the approach you might expect from groups that know they will have to deal with this administration for the next four years.
But notes of exasperation have begun to creep in, such as this line in a statement released by the National Corn Growers Association on Feb. 6 – “$1.5 trillion: The increase in real incomes due to liberalizing trade efforts since World War II; $82 billion in annual economic output the NCGA and the USCG said can be attributed to exports of feed grains; and 371,536 full-time jobs that can be linked directly or indirectly to grain and grain product exports in 2014."
The U.S. rice industry would be especially hard hit if Mexico retaliated against the imposition of a 20-percent tariff and stopped buying the 600,000 metric tons of rice the U.S. shipped to that country last year.
The USA Rice Federation hasn’t commented on that possibility, but the USA Rice CEO Betsy Ward said in a speech at the Arkansas Rice annual meeting that her organization could have problems if the administration moves ahead on its promise to renegotiate NAFTA.
Commodity crop producers aren’t the only ones concerned. The Los Angeles Times carried an article with the headline “Did someone say food fight? U.S. farmers – and especially those in California – fret over possible trade war” that noted 44 percent of the Golden State’s farmers’ revenues comes from exports outside the U.S.
And the Retail Industry Leaders Association is preparing to fight proposals such as the 20-percent tariff on imports from Mexico and the “border tax” on it and other countries’ exports to the U.S. The RILA says a border tax could cost American families $1,700 more for the products they buy and up to $1 trillion over the next 10 years.
For now most of the reaction has been civil, but you have to wonder how folks – especially farmers who mainly supported the new president – will react when those trade policies start hitting their pocketbooks?