Mateusz Perkowski/Capital Press File
Desperation in farm country due to low commodity prices and retaliatory tariffs by U.S. trade partners was the central theme of this week’s Senate Agriculture Committee hearing on trade.
The committee questioned Ted McKinney, USDA undersecretary for trade, and Gregg Doud, chief agricultural negotiator, on what is being done to resolve trade disputes and forge new trade agreements.
Committee Chairman Pat Roberts, R-Kan., said the U.S. needs to hold its trading partners accountable but there is growing concern about losing long-term markets the longer the retaliatory tariffs go on.
Ranking Member Sen. Debbie Stabenow, D-Mich., said the U.S. needs strong and meaningful trade enforcement but U.S. farmers cannot be collateral damage.
All the senators relayed the anxiety and frustration of their rural constituents, some with appreciation for USDA and the U.S. Trade Representative’s office.
But others came loaded for bear.
Sen. Michael Bennett, D-Colo., said the situation is creating a huge amount of stress for farmers and ranchers and they need the administration to act “rationally and reasonably,” he said.
Since the start of the Trump administration, 11 free trade agreements have been signed without the U.S., he said. “These are opportunities we’ve missed to open new export markets that cause real concern for my farmers and ranchers.”
Retaliatory tariffs are heightening the long-term consequences, and the disturbing story of a huge shift away from buying U.S. agricultural products is playing out in headlines across the world, he said.
He asked Doud how the trade war ends without U.S. agriculture taking a step backward.
“Your point about the world being divvied up while we’ve been watching is a point I’ve made many, many, many times,” Doud said.
As for retaliatory tariffs, China hasn’t honored the obligations it agreed to when it joined the World Trade Organizations, he said, running down the list of offenses.
“The point being with China is they need to change their behavior, and this is going on not just in agriculture but in other things. This is an administration the president said we need to do something about,” he said.
Bennett said he couldn’t agree more and didn’t need Doud’s lecture on the issue.
“But it would seem to me that provoking a trade war with Mexico, Canada and the EU when the issue is fundamentally with China — and when the growth for all of our farmers and ranchers in the West is going to come from the Pacific Rim — seems insane,” he said.
Sen. Joe Donnelly, D-Ind., said Hoosier farmers are getting crushed by commodity prices substantially below cost of production and their lives and farms are at stake. He asked McKinney what he would say to them.
“Yes, we are taking some short-term pain with the hopes of long-term gain. We’re trying to make some corrections that will fix many of the trade issues that we’ve been suffering from for a long time,” McKinney said.
There are farmers who are going to lose everything unless something changes, Donnelly said. Meanwhile, the administration has announced two additional levels of tariffs on Chinese goods. Farmers are asking when it will end, Donnelly said.
“It seems like the light at the end of the tunnel is a train coming at my farmers,” he said.
The administration has set aside $12 billion to help offset farmers’ losses caused by the trade wars.
McKinney said his hope is that work on the North American Free Trade Agreement and an agreement with Japan as well as other bilateral agreements will turn things around, and the administration is making headway on sanitary and phytosanitary barriers in existing trade agreements.
He did, however, admit there are some regrets in restructuring things that should have been restructured in the past.
“Those are not regrets; those are our neighbors and those are our neighbors who are losing their farms, who are losing their life’s dreams … ,” Donnelly said.
Other senators pointed to the reality that 95 percent of consumers live outside the U.S. and that trade is crucial. Some of the senators called for the U.S. to re-engage in the former Trans-Pacific partnership — which Trump pulled the U.S. out of shortly after assuming office — make better headway on new bilateral agreements and to end the trade war.
Sen. Tina Smith, D-Minn., said she had a sense that McKinney and Doud understand the desperation in farm country very well.
“I just, honest to God, I just wish the person who sits in the Oval Office understood it as well,” she said.