Farm Groups Fear Retaliation on Tariffs, Ask Trump to Minimize the Impact
President Trump’s decision to impose high tariffs on imported steel and aluminum, beginning as soon as March 23, may trigger retaliation against U.S. farm exports, said farm groups, who urged the White House to reduce the impact on the ag sector.
Canada and Mexico shrugged off administration attempts to couple tariff relief with concessions at negotiations for the new NAFTA. The White House announced of 25% tariffs on steel and 10% on aluminum on national security grounds but allowed a temporary exemption for the two North American neighbors and potential reductions for countries that have a security relationship with the U.S.
Senate Agriculture chairman Pat Roberts said the tariffs would become a tax on U.S. consumers. “As we have seen in past cases of increased tariffs, higher manufacturing costs will inevitably be passed down the supply chain,” said Roberts. The proposed tariffs would nullify positive gains created by the recent tax reform package passed by Congress.”
If China, the prime target of U.S. complaints about unfair competition, or other countries retaliate, they “will knee-cap demand for soybeans at a time when the farm economy is struggling,” said the American Soybean Association. “We have heard directly from the Chinese that U.S. soybeans are prime targets for retaliation.”
The National Corn Growers Association echoed Roberts in saying the tariffs could increase the price of farm equipment at home besides risking retaliation against U.S exports. The group said it hopes, “as the administration moves forward, it will work to minimize the impacts upon America’s agricultural sector.”
In an op-ed in a Capitol Hill newspaper, two wheat growers said it would be easy for other nations to mimic the U.S. in attacking its products. “It’s not a difficult argument for a wheat importer to say that if America needs domestic steel to build ships and tanks, they need domestic wheat to feed their soldiers.” The Obama administration challenged China’s wheat, corn, and rice policies at the WTO. “We are pleased that the Trump administration continues to pursue those cases, but the precedent set by the steel and aluminum tariffs could erase any benefits,” wrote Wheat Growers president David Milligan and secretary-treasurer Doug Goyings of U.S. Wheat Associates.
House Speaker Paul Ryan said he would urge the White House “to narrow this policy so that it is focused only on those countries and practices that violate trade law. There are unquestionably bad practices by nations like China but the better approach is targeted enforcement action against those practices.” Arizona Senator Jeff Flake said he would file legislation to nullify the tariffs – a long shot given how soon the tariffs would commence – “and I urge my colleagues to pass it before this exercise in protectionism inflicts any more damage on the economy.”