Flinchbaugh: End the trade war
February 6, 2019
President Donald Trump should end the current trade war, and if he will not, Congress should constrain him, Barry Flinchbaugh, a renowned agriculture professor emeritus at Kansas State University said at a Farm Foundation forum Feb. 5.
"It is time to admit it was ill conceived and was never going to work and simply end it," said Flinchbaugh, who has been an adviser to Senate Agriculture Committee Chairman Pat Roberts, R-Kan., for 47 years — a point Roberts made in his own speech just before Flinchbaugh spoke.
The new farm bill, which was the subject of the forum, "can make up" for some of the uncertainty caused by the trade situation, "but none of this is sufficient," Flinchbaugh said.
"I couldn't be more blunt. We need to end this trade war now. Putting tariffs on aluminum and steel was stupid, period. It has had all kinds of ramifications. Countries retaliate — surprise, surprise. We can''t act like they're not going to do that. They're not stupid."
The steel and aluminum tariffs, he said, have not only resulted in retaliatory tariffs on farm products that have hurt sales but also caused increases in the costs of production, especially on farm machinery.
The trade conflict with Canada on national security grounds is "ludicrous," he said.
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Flinchbaugh added that the United States should then build multilateral trade agreements and negotiate with the countries that are participating in the Trans Pacific Partnership agreement to rejoin it.
"It made no sense to pull out of TPP," Flinchbaugh said.
Noting that American farm net income has been cut in half in the past five years, Flinchbaugh said, "That is an astounding statistic. We've got problems in farm country. We are in the midst of a vicious trade war that will cost agriculture billions. History shows that no one wins the trade war. Everybody loses. Sales that have not been made are lost, it is simply like losing sleep. You can't make it up."
The Market Facilitation Program payments that the Trump administration has made through the Commodity Credit Corporation are "an attempt to correct part of that … but they are grossly inefficient so agriculture needs this farm bill more than it has needed any farm bill since the mid '80s."
Although Agriculture Secretary Sonny Perdue has said that the Trump administration will not make another round of MFP payments, Flinchbaugh said Trump might change his mind.
"Are farmers going to take the brunt of this period when they are innocent bystanders?," Flinchbaugh asked. "I don't think so. We can remedy this to a degree. I don't think they are going to throw us to the wolves."
Flinchbaugh did not mention a specific piece of legislation that would restrict Trump's powers to impose tariffs, but he said, "Congress can end that tomorrow. They are not helpless. They just need some fortitude to do some of these things. If you are going to handle authority as irresponsibly as it has been handled in the trade war you take away that authority or tighten it."
Public opinion polls have shown that farmers, especially large farmers, continue to support Trump, but Flinchbaugh said he believes that may be changing, especially if their bankers decline to loan them as much money as in the past.
"I notice change," Flinchbaugh said. (Farmers) are getting pretty vocal on this damn trade war. They are no longer accepting it out of loyalty — you don't hear we will take the short-run pain for the long run pain. There is no long-run gain."
Farmers "are still pretty quiet about it in terms of getting up at a meeting," but "they are embarrassed that they fell for (Trump's rhetoric) to a degree."
"When you go to see the banker to get financing the following year, reality sets in," Flinchbaugh said. "The bankers are not as ideologically tied to this administration as the farmers were at the beginning."
Flinchbaugh suggested White House officials "spend a little time in farm country. We've about had it." ❖