Farm leaders worry about retaliation from steel, aluminum tariffs
March 2, 2018
ANAHEIM, Calif. — Farm leaders attending the Commodity Classic here expressed shock that President Donald Trump announced that the United States would impose tariffs on imported steel and aluminum from all countries, and said they feared China and other countries will retaliate by reducing imports of agricultural products, particularly soybeans.
Trump told representatives of the steel and aluminum industries in the Cabinet Room of the White House that the tariffs are vital to save U.S. industries that have been unfairly subject to imports. Trump said the tariffs would be 25 percent for steel and 10 for aluminum and imposed for an indefinite period.
"It will be for a long period of time," Trump said.
"The tariffs announced by the administration will put the interests of other domestic industries over farmers," American Soybean Association President John Heisdorffer, an Iowa soy grower, said in a news release.
"Prior to today's (March 1) announcement, China has indicated that it may retaliate against U.S. soybean imports, which would be devastating to U.S. soy growers. Our competitors in Brazil and Argentina are all too happy to pick up supplying the Chinese market."
ASA noted that China is U.S. soy's largest customer, accounting for $14 billion in sales and more than a third of total U.S. soybean production.
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"Soybean farmers urge the White House to move forward with a China strategy that strengthens the competitiveness of our domestic industries, while at the same time growing our export opportunities," Heisdorffer said.
U.S. Wheat Associates, which markets wheat in foreign markets, and the National Association of Wheat Growers, which represents growers, said they are extremely disappointed in the decision.
"We have repeatedly warned that the risks of retaliation and the precedent set by such a policy have serious potential consequences for agriculture. It is dismaying that the voices of farmers and many other industries were ignored in favor of an industry that is already among the most protected in the country," the two groups said.
"If the United States is taken to dispute settlement at the World Trade Organization for imposing these tariffs, we call on the U.S. Trade Representative to avoid invoking the essential security exception under GATT Article XXI," the wheat groups continued.
"The recent Department of Defense memorandum made it clear that imported steel and aluminum did not threaten its ability to acquire enough from domestic suppliers to meet its needs. The USTR should not take the extraordinary step of invoking Article XXI to defend what we believe is protectionism."
NAWG President Jimmie Musick, a wheat farmer from Sentinel, Okla., said "at such an economically hard time for wheat growers, we do not want to see trade barriers brought against us from some of our top customers who are impacted by this decision."
"Wheat farmers battling a market in which China holds almost 50 percent of world ending wheat stocks can sympathize with steel and aluminum workers on the economic effects of Chinese policies leading to global oversupply. However, we hope that our legitimate concerns with this action are heard and taken into consideration in this process," they concluded.
Brian Kuehl, executive director of Farmers for Free Trade, a group cochaired by former Sens. Max Baucus, D-Mont., and Richard Lugar, R-Ind., said, "This announcement invites retaliation that we are deeply concerned will hurt American farmers."
"These tariffs are very likely to accelerate a tit-for-tat approach on trade, putting U.S. agricultural exports in the cross-hairs," Kuehl said. "Already we have seen China discuss tariffs on sorghum. The EU and China have also indicated they will move forward with swift retaliation in the wake of these tariffs."
"Everyone agrees we need to hold our trading partners accountable, but taking unilateral action to raise tariffs carries harmful unintended consequence," Kuehl said. "The agriculture sector knows from experience that our ag exports are the first to be hit by retaliation. Whether it's our chickens in retaliation for tariffs on Chinese tires, or U.S. apples and wine exports as a result of a Mexican trucking dispute, historically, agriculture always has the biggest target on its back."
Farmers for Free Trade recently released a report on the cost of trade retaliation to agriculture.
Agriculture Secretary Sonny Perdue, who participated in a town hall session here with corn, soybean, wheat and sorghum growers, told reporters that trade retaliation is always "a possibility" under these circumstances.
Perdue said the administration has to be prepared from a "mitigation perspective" to help the farmers if there are "market disruptions," but he did not give any specifics on how the government could help farmers if they lose markets.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, said "Tariffs on steel and aluminum are a tax hike the American people don't need and can't afford. I encourage the president to carefully consider all of the implications of raising the cost of steel and aluminum on American manufacturers and consumers."
Sen. Bob Casey, D-Pa., a member of the Senate Agriculture Committee who also comes from a major steel state, praised Trump's action.
"I commend the president for announcing his intent to take action to protect our steelworkers from countries, like China, that cheat on trade," Casey said.
"I have repeatedly called on this and previous administrations to aggressively enforce our trade laws. For years, foreign countries have been dumping steel into our markets and costing our workers their jobs and suppressing their wages.
"It has taken the administration far too long, but today's announcement of an intention to act next week is a welcome step," Casey said.
"When countries cheat on trade, Pennsylvania workers lose. I urge the administration to follow through and to take aggressive measures to ensure our workers can compete on a level playing field. When the playing field is level, Pennsylvania workers will outcompete any in the world."