Farm Foundation’s Cullman: Tariffs came at bad time
President Donald Trump’s imposition on tariffs on other countries that have led to retaliatory tariffs on U.S. farm products could not have come at a worse time for American agriculture, Constance Cullman, president of the nonpartisan Farm Foundation, said last week while commenting on the latest agriculture outlook from the Organization for Economic Development and Cooperation.
The outlook from the Paris-based organization of developed, wealthy countries said agricultural production is now plentiful and that prices and farm incomes may continue to fall, but does not include analysis of the impact of the tariffs that Trump initiated.
“The recent trade actions couldn’t have come at a worse time,” Cullman said, referring to current low commodity prices.
Economists have told farmers “figure out your business model, figure out how to be a competitive producer without government support,” she noted but the tariffs make it difficult to deliver “if you export a third of your product or more if you are an almond grower in California.”
And now the Trump administration is talking about providing additional support to protect farmers from the impact of the tariffs, she added, referring to Agriculture Secretary Sonny Perdue’s statements that the authorities of the Commodity Credit Corp. may be used to make payments to farmers.
If the Trump administration moves forward with that plan, the action would further “skew” the numbers in the report, Cullman added.
“The biggest, longest-lasting problem” over the next 10 to 15 years, she said, could be “the discrediting of institutions we have in place to monitor trade.”
The World Trade Organization has rules but it will be difficult “to hold China accountable” if the United States is questioning the rules of the WTO, she said, referring to Trump’s frequent criticisms of the WTO.
The economy of North America — comprising the United States, Mexico and Canada — “is a great economy,” Cullman said, but the conflicts over the North American Free Trade Agreement are now threatening the efficient supply chains that have been established in recent decades.
The total impact of the tariffs is unpredictable, she said, noting that countries want to assure themselves of supplies. After the Carter administration imposed an embargo on U.S. grain sales to the Soviet Union, “we never got that market back,” she pointed out.