Monday, July 22, 2019

'Mr. President, I beg you to quit losing' - Ohio farmer sizes up Trump’s failing trade policy.

I think most of us knew intuitively that Trump’s go-it-alone-ist, so-called trade policy was going to hurt American farmers. Here is the evidence at the ground level - literally.

Christopher Gibbs, a Republican, and Ohio farmer sizes up Trump’s failing trade policy in his report in the Wooster (Ohi0) Daily Record. Here it is (courtesy of Sherry Moreau)

I am an Ohio farmer and I voted for President Trump. He boasted during the campaign that voters would beg him to stop winning. I’m begging him to quit losing.

After his inauguration, the president pulled out of the Trans-Pacific Partnership. He bragged he could do better. The TPP would have expanded U.S. farm exports to 11 Pacific Rim countries forming a massive free market zone, excluding China. The TPP would have increased annual U.S. farm revenues by more than $4 billion. All lost.

By leaving the TPP, Trump signaled to China that we would abandon our Asian allies. To China, we looked like a lone gazelle on the Serengeti separating itself from the herd. Other TPP countries proceeded and now U.S. farm products are less competitive in Asia relative to those from Canada and Australia. Opportunity lost.

Trump called NAFTA “the worst trade deal maybe ever signed anywhere.” But since 1994, U.S. agriculture exports to Mexico and Canada have quadrupled. American farmers export more than $40 billion in agricultural products each year to those two countries. The president is wrong. NAFTA was and remains the single best deal for Midwestern corn, soybean and livestock farmers in my professional lifetime.

Citing bogus national security concerns, Trump placed tariffs on steel and aluminum imported from our trading partners. That alienated our friends and raised the cost of tractors, grain bins and fencing. When farmers buy, they buy products manufactured from steel and aluminum. Predictably, countries retaliated with tariffs on U.S. agricultural products, creating more losses for farmers.

By claiming national security, Trump made it easy for other countries to use the same rationale to block U.S. food exports. Trump is now declaring that foreign autos are a national security threat, thus laying the groundwork for a trade war with the European Union and Japan.

In May, the U.S. agreed to remove the tariffs on Canadian and Mexican steel and aluminum with little to show for the year and a half of economic pain. In his reversal, the president trumpeted how U.S. farmers now won’t face retaliatory tariffs. The only reason we faced retaliatory tariffs and lost market share was because of this president.

What did we get for this trade war? U.S. steel and aluminum industries were not rebuilt. Tariffs failed to leverage a significantly better deal with Canada and Mexico. The new U.S.-Mexico-Canada Agreement is a continuation of NAFTA with a few modernizing twists, like new paint and doublehung windows on an already comfortable home. While the USMCA will increase dairy exports, much of that gain had already been negotiated as part of the TPP. The president spins the USMCA as the best deal ever. It’s a good deal that Congress should pass because it continues the phenomenal success of the original NAFTA. But with the president’s loss of 40 seats and control in the U.S House of Representatives, ratification is uncertain.

In just 16 months Trump’s trade policies have caused longterm damage to the U.S. farm economy. In March 2018 my soybeans were selling for a local cash price of $10.50 per bushel. Now, the same soybeans are selling below the cost of production at $8.50. The president’s trade war lost my biggest and best soybean customer — China.

Yes, industrialized nations are right to push back against China’s theft of intellectual property and forced tech transfer. With the TPP we had China in our sights. Now, U.S. farmers have lost the opportunity to leverage the TPP partnering countries against China in a coordinated effort.

With 95% of the world’s population living outside the U.S., trade is agriculture’s only marketing plan. It’s what we do. Farmers now watch in horror the longterm dismantling of critical markets. The same markets farmers built one handshake at a time with our own dollars over decades are now lost.

The disruption the president has caused won’t subside with a China resolution. The disdain shown to the populations of allied countries from Trump will linger beyond their elected leaders. Like Jimmy Carter’s 1980 grain embargo, farmers will pay for these actions for years to come.

In June, as the Mexican Parliament was preparing to ratify the USMCA, Trump threatened to do an end run on the unratified USMCA agreement and use tariffs as a political weapon against Mexico to prod them into assisting with Central American migrants. All future negotiating trust now lost.

President Trump said that “trade wars are easy to win.” The hard truth is there is no win for agriculture just around the corner regardless of how many multibillion- dollar taxpayer bailouts are raided from the Treasury. Mr. President, I beg you to quit losing.

Christopher Gibbs raises corn, soybeans, alfalfa and seed stock beef cattle on his 560 acres in Shelby and Logan counties. He is a former chair of his local Republican Party and the Shelby County Board of Elections.

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