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Farmers See Trade War as a 2-Edged Sword

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Farmers See Trade War as a 2-Edged Sword

American farmers see the current trade war as needed, but very harmful. Most media reports have focused on the damage the current trade war with China is doing to the markets and to the financial situation of farmers. Yet, even while feeling the financial pain, producers understand why it is necessary and support the President’s actions. Texas Farm Bureau President Russell Boening is chairman of the AFBF Trade Advisory Committee. He told the House Ways and Means Committee last week that farmers and ranchers depend on free trade and are willing to fight to get it, “We rely on trade each and every day to market the products that we work hard to grow. In fact, about 25 percent of the U.S. farm income is derived from selling ag products internationally. We are concerned with the blowback from the administration’s decision to place tariffs on our trading partners.”

Boening said the trade abuses by China must be dealt with if U.S. farmers are to continue to grow farm exports, “We must have ag trade in China. However, we must address this blatant abuse. If our president is successful, and we desperately want and need him to be sooner rather than later, this could be a tremendous opportunity for agricultural trade.”

South Dakota Farm Bureau President Scott VanderWal testified that the U.S. needs better trade agreements like NAFTA, “I think we have kind of been beat out, historically, in these trade agreements. There are higher tariffs on products going that way then products coming this way.”

However, this trade war comes at a difficult time for farmers. Boening said, “Net farm income has dropped 52 percent in the last five years, making it extremely difficult for farmers and ranchers to continue operating. The addition of a trade war comes at a time when we can ill afford it.”  Other witnesses in the hearing pointed to China exceeding it’s WTO minimum-support price for key crops in 2015 by nearly $100-million — more than the safety net for all U.S. crops.

Meanwhile, the president is not backing down from his trade fights, threatening to up the ante with China with massive new tariffs.