U.S. Farmers Say They're Paying For Trump's Aggressive Trade Actions
STEVE INSKEEP, HOST:
We do not know yet if it's fair to say the United States and China are in a trade war. War is used here as a metaphor in any case, but it's a useful word to keep in mind because in a war, people get hurt. Some American farmers say they are paying the price for the aggressive trade actions of President Trump, actions he's taken against China. Lawmakers certainly worried last month in a hearing of the House Appropriations Committee. Secretary Steven Mnuchin of the Treasury Department defended President Trump's steel tariffs, and Iowa Republican David Young wanted to know if other countries might respond with tariffs on U.S. agriculture.
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STEVEN MNUCHIN: I can tell you the president loves farmers and the agricultural community.
DAVID YOUNG: It doesn't seem so with some of the policies that are coming out, and there's great concern with folks in the Heartland.
INSKEEP: Now we know China has responded to U.S. trade moves with tariffs, including some on U.S. farm products, which we will discuss with David Salmonsen senior director for congressional relations at the American Farm Bureau Federation. Thanks for coming by this morning.
DAVID SALMONSEN: Happy to be here.
INSKEEP: So who's affected here?
SALMONSEN: Well, we've got all kinds of farmers across the country affected by this, at least, we hope, just an initial round of tariffs from China. A 50 percent tariff is going to go on a lot of fruit and nut producers. So that affects - and wine. So you've got included in that apple growers, cherry growers, oranges, lemons, products like that. And a 25 percent tariff on several pork products that we export to China. So you've got pork producers across the country that eventually could feel the impact of some lower prices if - you know, pork products are more expensive in China - if they're not bought as much, that can filter back down the production chain.
INSKEEP: So is this a big part of business for those growers?
SALMONSEN: This will be a part of the business that they really have relied upon. Pork, for example, over $1.1 billion a year into China. Pork exports, about $6.5 billion to $7 billion a year. So it's a big market, and it's been a really growing market and something they really look to. Citrus from the U.S., the oranges and the lemons and such, you know, it's over $200 million a year to China. So these are markets that have been very important - tree nuts, almonds, walnuts and the such. Very important.
INSKEEP: So this is not huge in the grand scheme of the American economy, but if you're a farmer and you were making - your industry was making several billion dollars and it goes down 10 percent or something, that would be a loss.
SALMONSEN: Yeah. If you're the ones impacted by this. And, of course, a lot of this depends on what will the reaction be in, you know, in China to these higher tariffs? Will the buyers, will there still be a market for products even with higher prices? Will they have to go elsewhere? Will that market then be filled by competitors? You know, very few things that we're the only supplier of. There are other countries out there.
INSKEEP: So are the members of the Farm Bureau Federation looking at this and saying, well, this is just the way it has to be? There's this battle the United States is having with China, and someone's going to suffer and I guess it's us?
SALMONSEN: Well, I don't think they really look at it that way. I think that we've been saying a lot over the past year, and up until now, you know, find a way to work on these issues otherwise. We've seen this in the past, this retaliation issue that hits agriculture. I remember in the Obama administration, you had the thing with the tires, tires from China. Well, for a while, China didn't buy our poultry. And you had the NAFTA, the trucking dispute with Mexico several years ago. There were a whole bunch of ag products along with other products on a list of things that there were higher tariffs imposed.
INSKEEP: Sounds like you guys suffer every time.
SALMONSEN: Well, ag seems to get hit the first. You know? It's certainly there as part of the things that can be hit, and a list of products is not new. Remember, the European Union had published a very extensive list. Now they've been at least temporarily taken off the steel and aluminium tariff. They're getting at least a temporary exemption. But they had several products on the list, and it was a fairly political list in the sense that there was Kentucky bourbon, there were Harley Davidson motorcycle - you know, from Kentucky, of course - Harley Davidson motorcycles and cranberries from Wisconsin. So you can think of them...
INSKEEP: Paul Ryan, Mitch McConnell.
INSKEEP: Leaders from those states.
SALMONSEN: You know, they were making sure they weren't left out.
INSKEEP: Well, here's another thing. I mean, if we looked at the 2016 election map, the counties that are red, that went for President Trump, I bet that's where nearly all the farms are.
SALMONSEN: Well, a lot of them, certainly, across the country. That's where the bulk of American agriculture - though, you know, agriculture and farms are everywhere in this country. But a lot of this is certainly, agriculture, when it gets hit, when it gets touched. And, you know, a lot of this you can't substitute for. Say you've got a fresh product. You've got to sell it, or you're selling it at loss or for nothing at all.
INSKEEP: So is President Trump letting your people down?
SALMONSEN: Well, we're concerned about this approach, and we certainly want them to talk. You know? There's a whole big issue with steel, and we understand that. This is a worldwide issue. China's steel overcapacity has been the subject of a lot of people talking. There is a whole international organizations through the OECD trying to look at this. Now it's come to some back and forth on this. We just hope it doesn't last very long.
INSKEEP: Well, there's the flip side of the argument, though. Isn't it fair to say, as you point out with steel, trade with China isn't working? The playing field is not level. Perhaps it's not even level for your growers, even if they're able to sell something in China. Doesn't the United States have to try something new?
SALMONSEN: I think the United States has to find a way to deal with this issue. But for agriculture, trade with China's been very good. When you think of a couple of decades ago, we probably didn't sell a billion dollars' worth of ag to China, and we're over $20 billion a year now. And the whole Asia-Pacific region is really the growth part. That's where you look at the growth of the Chinese economy, how much farther they can go. You look in that whole region, and that's why we want to have this administration reengage with that region. You know, we felt it was a step back a little bit to leave from the original Trans-Pacific Partnership, but that organization's still going. It's been renamed the Comprehensive and Progressive Trans-Pacific Partnership, and we'd like to reengage in that.
INSKEEP: Mr. Salmonsen, thanks for coming by. Really appreciate it.
SALMONSEN: Appreciate it.
INSKEEP: David Salmonsen is senior director for congressional relations at the American Farm Bureau Federation.
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