Ag Policy Blog

Pushing Back on President Trump's Trade Team

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A Chinese flag on a cargo ship at the Port of Long Beach, Calif., earlier this year.

Republican lawmakers and the American Farm Bureau Federationare no longer holding their powder when it comes to criticizing Trump Administration leaders about trade.

Sen. Joni Ernst, R-Iowa, fired off a news release Thursday after White House trade advisor Peter Navarro told CNBC that the economic impact of the trade war is a mere "rounding error" and that the Trump Administration is playing a broader game of chess.

“Mr. Navarro, America’s farmers are caught in the crosshairs of this game of ‘chess.’ Offhand comments like the ones that Mr. Navarro made in his interview with CNBC today disregard the people whose livelihoods depend on global trade," Ernst said. "In Iowa alone, more than 456,000 jobs are supported by trade, and these new tariffs are threatening $977 million in state exports. That is no ‘rounding error.’ Those are real people – Iowans – who are waiting for terms to be negotiated, for new deals to be finalized. We need to lessen the pressure on these hard-working farmers, and let them sell their goods."

Ernst added, "Iowans come to me every day to talk about trade, trade, trade and the RFS. And, I have had productive conversations with Ambassador Lighthizer, Secretary Perdue and President Trump about the administration’s hard work to open up new markets for our products and finalize pending deals. Farmers are optimistic, but we can’t take optimism to the bank. Comments like the ones made by Mr. Navarro hurt that progress and hurt our farmers."

ADDITION: On Friday, the American Farm Bureau Federation also took on Navarro's comments. Zippy Duvall, president of AFBF, said, Navarro's view that the damage done in the trade battle is a little more than a rounding error "are out of touch with the pain our farmers and ranchers are experiencing. Making farmers and ranchers pawns in this chess game is extremely risky for our nation’s agriculture economy and food security.

Duvall added, “Prices for all of our export-sensitive farm goods have tanked since May, when this tariff game started. Farm income was already off by half compared to four years ago, with debt levels rising—hardly a strong position for agriculture going into this trade war. This situation will only worsen as combines roll between now and the fall election season. The nation’s farmers and ranchers support the broader goal of strengthening our overall economy and trade balance, but not at the risk of long-term, irreparable harm to our ag exports and the jobs they create.

“Farmers and ranchers are looking for reasons to be optimistic about the current trade situation," Duvall said. "We need a win. We must wrap up this trade war quickly, complete the negotiations with Mexico and Canada, and open more markets by negotiating deals with Japan, the UK and other trade partners around the world.”

U.S. Secretary of Commerce Wilbur Ross also had an interview on CNBC where he made a comment that China is “not very effectively” changing its purchases of U.S. soybeans for supplies from Brazil.

Nobody quite called out Ross on this comment. But USDA's export sales are easily accessible data updated weekly. Those sales show China has bought 27.5 million metric tons of soybeans (just over 1 billion bushels) since the market year began Sept. 1, 2018. At the same time last year China had bought nearly 34.6 million metric tons (1.27 billion bushels). So the U.S. has sold nearly 21% fewer soybeans to China this year than last. Outstanding sale contracts to China a year ago were three times what they are now.

Ross added in China is finding that it is “not as easy to respond to these retaliatory measures as they thought... I think the EU will find the same." Ross said the Trump administration has seen “positive developments” in trade talks with Mexico, CNBC reported.


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