Trade and Tariffs Dominate 2018 in Rural America

Jan 4, 2019  | 7 min  | Ep4420

In an Associated Press/N-O-R-C poll, taken just before the partial government shutdown, the economy, healthcare and immigration were among the big concerns for U.S. citizens in 2019.

A year ago, the trade war was heating up and nobody knew where we would end.  

Paul Yeager takes a look at 2018 in this week’s Cover Story. (contact paul.yeager@iptv.org)

Trade dominated the discussion in 2018 for those involved in agriculture. From reworking NAFTA to China, farmers were caught in the middle.

President Donald Trump: "I view them as a friend. I have tremendous respect for President Xi. We have a great relationship.”

Despite the kind words, President Trump signed a memorandum aimed at cutting the $375 billion dollar trade deficit with China by levying billions in tariffs.

The National Corn Growers Association and the Iowa Soybean Association agreed there were no winners in a trade war.

Kirk Leeds, CEO, Iowa Soybean Association: “I that there are ways to resolve it but it’s gonna have to be in a way that saves face for the Chinese, as they would call it, and it’s gonna have to give the President some win. Let’s hope they find that solution.”

The U.S. threw the first punch to protect intellectual property and technology theft with a $50 billion haymaker.

China countered and the trade war was on before much of spring planting had begun.

In April, Larry Kudlow, the newly minted head of the White House’s National Economic Council, cautioned against panic and said the president wanted to grow the American economy, not to hurt any of its sectors.

Larry Kudlow, White House National Economic Council: “this should not be viewed as strictly mano-mano, punitive, damages, you know, that kind of thing. This has gotta be viewed in the context of economic growth, which is what this administration is all about. And that’s the end game.”

Soybeans producers saw a major export market almost disappear as the tension escalated between the U.S. and China.

Pork producers gathered for their annual World Pork Expo in June as industry leaders made their case for U.S. producers to compete on the world stage.

Neil Dierks, CEO, NPPC: “The issue for us is access. If we can get into compete, we’ll compete with anybody. When you talk about trade agreements, we’re looking at duties and non-scientific barriers that allow us to come to market and compete.”

The pressure on other industries started to intensify by late June as President Trump levied tariffs on the equivalent to 90 percent of the goods that China shipped to the U.S. last year.

Wilbur Ross, Secretary of Commerce: "The tariff actions taken by the president are necessary to revive America's essential steel and aluminum industries. They have been harmed by imports to the point that allowing imports to continue unchecked threatens to impair our national security."

Meanwhile, NAFTA talks between Canada, Mexico and the U.S. hit high tide near Labor Day as all three countries faced several deadlines – most of them political.

Chrystia Freeland, Foreign Affairs Minister, Canada: “Rules of origin in cars is an incredibly complicated issue. But, we had reached a high level agreement with the U.S. in the spring and we are encouraged by the progress that they made with Mexico this summer.”

The new USMCA was signed by leaders of the three countries in late November.

President Donald Trump: "As part of our agreement, the United States will be able to lock in our market access to Canada and Mexico, and greatly expand our agricultural exports - something we've been wanting to do for many years. This is an amazing deal for our farmers and also allows them to use cutting edge biotechnology and eliminates non-scientific barriers.”

The landmark agreement has yet to be ratified by the Mexican Congress of the Union, Parliament of Canada, or the U.S. Congress.

USDA Secretary Sonny Perdue spent much of 2018 pledging to help producers stung by the sharp drop-off in trade with China.  Those efforts later became a short-term relief package worth up to $12 billion.

Sec. Sonny Perdue, USDA: “While it is very painful in the meantime, we know that a fair and free trade environment is going to be better for farmers in the long-term.”

Congress was well into their work on the 2018 Farm Bill when the trade story shifted.

The legislation stalled over work requirements involved with adults covered by the Supplemental Nutrition Assistance Program.

Rep. Jim McGovern, D – Massachusetts: “As I find myself saying far too often these days, a bad process produces bad policy. And this Farm Bill is a bad policy plain and simple.”

Rep. Rob Woodall, R – Georgia: “We’re talking about a bill that’s going to take a major step forward in lifting folks out of poverty. A major step forward in putting people back to work. A major step forward in making sure that folks that receive federal benefits are those who need federal benefits.”

“On this vote, the yeas are 198 and the nays 213, the bill does not pass.” 

Democrats gained 30 Republican votes to defeat the bill.

Changes would be made and the Farm Bill finally emerged in a lame duck session of Congress.

Language to assist in forest management also made a late appearance at the talks as wildfires raged through the West. More than 8.5 million acres were burned in 2018 by nearly 56,000 fires. The number of acres devastated was higher than the 10-year average.

The Environmental Protection Agency came under fire when it was revealed hardship waivers were being granted that circumvented ethanol blending requirements in the Renewable Fuel Standard.

Scott Pruitt, Former EPA Administrator: “I can’t emphasize enough that the granting of these small refinery exemptions is objectively determined. It’s not policy, it’s not subjective.”

Scott Pruitt would resign from EPA in early July.

President Donald Trump: “Today. We are unleashing the power of E15 to fuel our country all year long. Not 8 months, all year long.”

The president rallied supporters in farm states over an increase in ethanol blends. His maneuver in the lead up to the mid-term elections asked the EPA to grant a waiver allowing the nationwide use of E15 during the summer months.

The November election proved fruitful for Democrats as they would win the majority in the House of Representatives. Republicans added seats to their hold on the Senate.

The president looks to move his policy agenda down the road in 2019 which was ramping up under the shadows of a government shutdown, the third of 2018.

For Market to Market, I’m Paul Yeager.

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