Farmers among casualties of global trade war

Colleen Kottke
Wisconsin State Farmer

In a move that has already provoked retaliatory measures, the Trump administration announced its intention to impose a 25 percent tariff on steel and a 10 percent tariff on aluminum imports from the European Union, Canada, and Mexico, effective midnight Thursday, May 31.

Farmers around the country are caught in the middle of a back and forth trade war following President Trump's announcement to enact tariff's against U.S. allies.

Producer-driven agriculture groups from around the country sounded off on the latest development in the back and forth trade war saga, fearing that farmers will be among the casualties.

The National Farmers Union (NFU), a grassroots, producer-driven organization, has long advocated fair and transparent trade policies that reduce the U.S. trade deficit and support family farmers and ranchers. 

President Roger Johnson says unfettered free trade has characterized U.S. trade relationships for many decades, often at substantial cost to our farmers and ranchers and our nation’s economy.

"Though we agree with President Trump’s inclination to address unfair trading practices and reduce our trade deficit, provoking a global trade war with our closest allies hardly seems like a solution," Johnson said, adding that the on-again, off-again tariffs will likely result in the opposite of their intended effects. "Agriculture is always the first casualty of retaliatory tariffs, and it is no different in this instance."

All targeted countries have already announced that they will levy taxes on a number of U.S. agricultural products, which could have widespread, negative consequences for family farmers and ranchers, he said.

"Family farmers and ranchers are already experiencing severely depressed farm prices and a 12-year low in farm income. They cannot afford to serve as collateral in a trade war," Johnson said.

U.S. Grains Council President and CEO Tom Sleight also chimed in on the new tariffs on Mexico, Canada And The European Union. Sleight says grain crops will likely be among the first products targeted by the counter measures from the organization's trading partners.

"These countries are among our closest neighbors and friends. We have spent years building markets in these countries based on a mutual belief that increasing trade benefits all parties," Sleight said. "We had strong hopes this situation would be averted permanently, but it now appears we need to prepare for retaliation and its direct impact U.S. farmers."

President Donald Trump tweeted that Canada has mistreated U.S. farmers on trade and officials there "must open their markets and take down their trade barriers!"

His tweet came Friday, June 1, the same day steel and aluminum tariffs were scheduled to take effect against Canada, Mexico and the European Union.

The U.S. allies pledged retaliatory countermeasures and warned of a trade war that would ultimately hurt American consumers.

Trump tweeted: "Canada has treated our Agricultural business and Farmers very poorly for a very long period of time. Highly restrictive on Trade! They must open their markets and take down their trade barriers! They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?"

Countries around the world are fighting back against President Donald Trump's decision to slap tariffs on steel and aluminum imports, announcing retaliatory countermeasures and warning that the U.S. plan will hurt U.S. consumers.

French President Emmanuel Macron said in a statement Friday that he told Trump in a phone call that the new U.S. tariffs on European, Mexican and Canadian goods are illegal and a "mistake." Macron pledged the riposte would be "firm" and "proportionate" and in line with World Trade Organization rules.

Jim Heimerl, president of the National Pork Producers Council, says President Trump's decision significantly heightens the organization's concern as Mexico is already threatening to retaliate against U.S. pork.

“Faced with tariffs imposed by the U.S., Mexico will impose equivalent measures to various products such as flat steel (hot and cold foil, including coated and various tubes), lamps, pork legs and shoulders, sausages and food preparations, apples, grapes, blueberries, various cheeses, among others,” the government of Mexico said in a May 31 statement.

U.S. pork shipped $1.5 billion of product to Mexico, its largest export market, and $792 million to Canada, its fourth-largest market, last year.

"Global export market uncertainty has resulted in considerable lost value for U.S. pork producers. According to Iowa State University Economist Dermot Hayes, hog futures dropped $18 per animal, amounting to a $2.2 billion loss on an annualized basis, since March 1 when speculation about U.S. pork access to the critical Chinese market began," Heimerl said.

The Ohio hog farmers says the market disruption caused by export market uncertainty comes at a time when U.S. pork is expanding production to record levels.

"Five new pork processing plants have recently opened or will soon begin operations, increasing U.S. pork production capacity by approximately 10 percent from 2015 levels by next year," he pointed out. "Exports accounted for more than $53 of the average $149 value of a hog last year and support over 110,000 U.S. jobs."

North Dakota farmer Kevin Skunes, president of the National Corn Growers Association (NCGA), says farmers are busy with planting season but are moving forward without knowing who will buy their crop when it’s harvested later this year.

"With a 52 percent drop in net farm income over the last five years, and depressed commodity prices, this is not the time to face such a burden," Skunes said. "This uncertainty impacts every step of the agriculture economy, from securing financing to marketing." 

The Associated Press contributed to this report