Time for Trump to dig out of the tariff pit
In 2016, dairymen and women were among the agricultural coalition that helped flip traditionally blue states red — places like Wisconsin, Michigan and Ohio — during Donald Trump’s journey to the White House.
Two years later, however, that support has frayed as optimism has given way to disillusionment. The president may soon discover the once-supportive American farmer no longer has his back.
When Trump announced he would scrap the NAFTA pact in May 2018, American farmers generally gave him the benefit of the doubt. After decades of unfavorable trading terms, those in the agriculture sector justifiably sought a more level playing field. But for a chief executive who often brags about “the art of the deal,” Trump continues to have a difficult time closing them: His aggressive-and-disruptive negotiating strategies continue fueling a staggering four-year downturn in milk prices.
The numbers tell the tale: Earlier this month, the Commerce Department reported that the nation’s 2018 trade deficit set a record of $891.2 billion (the largest in America’s 243-year history) — a reminder of the adage, “When you find yourself in a hole, stop digging.”
That pit already feels way too deep for the dairy sector: U.S. exports of cheddar cheese fell 9 percent in December 2018 from a year earlier; nonfat dry milk fell 17 percent; butterfat exports plunged 29 percent; dry whey exports plummeted 36 percent, according to data compiled by the Chicago-based CME Group. The list goes on and on as retaliatory tariffs from the U.S.’s largest trading partners — Mexico, Canada and China — continue to exact a toll.
Meanwhile, Alan Levitt, vice president of communications and market analysis for the U.S. Dairy Export Council, notes the “loss of sales to China — America’s third-largest single-country market — followed mid-year retaliatory tariffs, are playing a role in the year-end decline,” says Levitt.
While the Trump Administration claimed to have reached a new North American deal with Mexico and Canada in November, it has remained unratified and retaliatory tariffs are still choking off commerce by destroying the dairy industry. Every day that critical trade pacts remain unsigned, foreign markets close their doors — often permanently — to U.S. dairy producers.
President Trump and Congress must take immediate action before it is to late. Your words do not match deeds. As a result, dairies of all sizes — some that have been in families for five generations or more — are buckling under the weight, and finally calling it quits.
It’s time to staunch the bleeding. America’s dairy sector — from producers to processors, logistics to retailers — all understand the importance of equitable trade deals, the elimination of unnecessary tariffs and the expansion of marketplaces for their goods. But it’s long past time we ask, “Let’s wait and make sure it’s done right", instead "it must be done now and must be done right!”
Now is not the time for passivity. Dairy producers have to step up to the plate and get more involved. Whether picking up a phone or typing an email, we need to contact our lawmakers and send a clear message: If our current leaders can’t provide an answer, we need to elect leaders who will.
Fischer is the CEO of the American Dairy Coalition