Trump must modernize NAFTA now to protect farmers
In response to President Trump’s trade actions over the last few months, China has since fired back by announcing duties on corn and other agricultural products like pork and soybeans, confirming what farmers have feared all along: retaliatory tariffs ultimately hurt rural America first.
These disputes amount to bad timing for the U.S. agriculture sector. As we head into the planting season, uncertainty is already looming over growers who are still suffering from declining prices and income. And according to the most recent Farm Forecast, net farm income in inflation-adjusted dollars is at its lowest level since 2002. This only furthers the impact of these retaliatory tariffs.
Yet the punches keep coming. China recently announced a 179 percent tariff on sorghum that will take effect almost immediately. The tax will hit Kansas the hardest. The Sunflower State is the top U.S. producer of sorghum, and a key state for President Trump. On top of that, the EU has developed a list of “rebalancing” duties to the tune of $3.4 billion. Although we don't yet know what products this list includes, its economic impact is sure to be felt throughout the heartland.
Crucial about all this is that there are no winners in a trade war. The trade tit-for-tat could ultimately end up shutting the door on millions of pounds of pork, over three thousand tons of beef and $14 billion of soybeans meant to be sold around the world. The expanded list of tariffs on exports is making America’s farmers the first casualties of the trade war between the U.S. and China.
Farm-belt voters sent President Trump to the White House for one reason; to Make America Great Again. And in many ways, he has. He’s dramatically cut taxes and rolled back regulations that for years held our industry back. We should not back-peddle on this progress and risk losing critical agriculture markets. This is why preserving critical trade deals like North American Free Trade Agreement (NAFTA) is so important now.
NAFTA has been a boon for America’s food and agriculture industry. It has added annual economic activity and supports 43 million American food and agriculture jobs. According to Americans for Farmers & Families, this has helped in exporting over $43 billion worth of products to our trading partners in Mexico and Canada in 2016. That’s a quarter of all U.S. agriculture exports for that year.
If the U.S. withdraws from NAFTA, there will be severe consequences for America’s farmers, and for our regional, national and global economies. Without NAFTA, farmers will pay millions of dollars in extra tariffs and taxes. They will be forced to reduce exports and thus reduce production. It’s a downhill slope – American farm products will be less competitive in Canada and Mexico relative to products from other countries.
And what many lawmakers in Congress already know is that withdrawing from NAFTA isn’t just a problem that impacts America’s agricultural industry. It will devastate industries across the country, putting at risk hundreds of thousands of jobs in the manufacturing, engineering, automotive, and oil and gas industries as well.
The stakes have never been higher. It’s encouraging that President Trump is meeting with and listening to farmers, and the administration has expressed their confidence that there will be a better NAFTA deal in the near future. But in light of escalating trade tensions with China and the EU, what workers and families across America need now more than anything is not rhetoric. It’s action.
Securing and expanding access to new customers around the world is critical to protecting our farmers and building and strengthening rural communities across America. As we approach International Trade Month in May, our farmers, families, industry, and economy are hopeful that President Trump will deliver.
Skunes serves as the president of the Corn Board of the National Corn Growers Association.