Trump: Farmers are Patriots

USDA Looking at Options for Protecting Farmers From Chinese Tariffs

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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USDA Deputy Secretary Steve Censky talks about tariffs and the impacts on farmers Monday during a meeting with members of the North American Agricultural Journalists. (DTN photo by Chris Clayton)

WASHINGTON (DTN) -- Calling farmers "great patriots," President Donald Trump acknowledged Monday that American farmers could suffer in the trade dispute with China. But the president said farmers would end up doing better than they are now once the trade barbs have ended.

Speaking before a Cabinet meeting at the White House, Trump lashed out at previous administrations, blaming them for forcing his White House to renegotiate the North American Free Trade Agreement and go head-to-head with China over theft of international property. Trump also criticized China for choosing to impose tariffs on U.S. farm products.

"They want to hit the farmers because they think it hits me; I wouldn't say that's nice, but I'll tell you our farmers are great patriots," Trump said. "These are great patriots and they understand that they're doing this for the country. And we'll make it up to them, and in the end they're going to be much stronger than they are now."

The president added, "Between NAFTA and China and all of the things we've been doing, we're going to make them much better. It's not nice when they hit farmers specifically because they think it hits me. That being said, we're doing very well on trade and trade deals."

The U.S. and China have been ramping up their rhetoric and tariff proposals since last week when the Trump administration proposed $50 billion in tariffs against Chinese products. China responded with proposed tariffs on more than $16.5 billion in U.S. agricultural products. President Trump then ordered his administration to consider another $100 billion in tariffs on Chinese products.

China increased the tariffs on U.S. pork exports by 25% last week. Pork accounts for $1.1 billion in U.S. exports to China. A few days later, China announced possible 25% tariff increases on soybeans, corn, beef, sorghum and an array of other agricultural products.

Late last week, Trump then ordered Agriculture Secretary Sonny Perdue to review different options for helping farmers with any economic pain that could come from Chinese tariffs.

Speaking to members of the North American Agricultural Journalists on Monday, USDA Deputy Secretary Steve Censky said USDA is working to ensure farmers don't bear the brunt of any type of trade retaliation, though he did not detail specific actions.

"I think we're in the process of vigilantly looking at that right now and working hard to make sure we are ready so something can be announced when we think it is appropriate," Censky said.

Censky added that USDA has to also ensure whatever remedies are developed to help farmers also have to be compliant with World Trade Organization rules. Mainly, however, USDA could buy some various commodity products if the prices become low enough to demand it. USDA has done that in the past with pork, for instance. Regarding a crop such as soybeans, commodity programs are locked in until a new farm bill is passed.

For 21 years prior to becoming deputy secretary last year, Censky was the CEO of the American Soybean Association, which has issued some pointed statements about the group's concerns about Chinese retaliatory tariffs affecting a $14 billion market.

"Anytime there is action that could potentially affect your No. 1 export market, I understand the concerns very well," Censky told reporters. "Certainly, we're hoping we can be successful and China comes to the table to address their intellectual-property practices. We know that those practices are in existence. We've heard about them for a very long time, and the president's very much determined to try to bring them to the table and make sure there is not theft of intellectual property that negatively affects U.S. manufacturers, U.S. workers and U.S. jobs."

Further, there are questions regarding just how tough China can be with U.S. soybeans because China relies on U.S. imports as much as soybeans from South America.

"Certainly, they (Chinese buyers) can tilt or shift some of their imports to favor South America, but really the entire world market for soybeans, including China's, is very much dependent on this dual-hemisphere production that we have in the world today," Censky said. "We have North American production and South American production, and the world market for soybeans, including China, can't just be satisfied through Southern Hemisphere production alone."

Censky said the impacts aren't felt by just American farmers -- Chinese consumers could suffer as well. "I think that's something the Chinese need to be cognizant of," he said.

Zack Clark, a lobbyist for the National Farmers Union, cautioned reporters earlier in the day that the risks of bigger stocks are the major concern if China pulls back on its purchases of U.S. farm commodities.

"I think these trade impacts, and we lose a part of the Chinese market, the stocks are already so burdensome that we could lose more than just this current year," Clark said.

NFU wants Congress to raise reference prices in the Price Loss Coverage program as part of the farm bill talks because it's likely soybean, corn and other commodity crops will shift more heavily to PLC once farmers get a chance to re-enroll in a farm program.

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Chris Clayton