In 2016 President Donald Trump campaigned on balancing the United States’ annual trade deficit of $500 million. Fast-forward to March 2018, President Trump announced tariffs on steel and aluminum. Now the $23 billion U.S. ag industry is to be impacted by global trade decisions.
“He exempted certain nations. China was not one of those nations that he exempted and that’s kind of started a tit for tat on trade,” said Brandon Willis, a professor of applied economics at Utah State University and senior advisor to former secretary of agriculture Tom Vilsack.
Willis said China has filed consultations with the world trade organization. That gives the U.S. and China 60 days to resolve the dispute.
“Soybeans and pork are a big deal,” Willis said. “It’s going to impact the bottom lines of producers if we don’t get this sorted out.”
Willis said the tariffs could impact other commodities like beef and poultry.
“It was around 2002 when Russia banned our poultry,” Willis said. “What you saw was within a month, cattle futures had also dropped $18 or so, $15 a hundred weight. Just because beef isn’t directly impacted, doesn’t mean beef producers won’t feel it in their bottom lines.”
The Trump administration is currently working on the Korean Free Trade agreement and renegotiating the North American Free Trade Agreement, or NAFTA. If those trade negotiations fall through and the U.S. and China can’t resolve the current trade dispute, the American economy could suffer.
“The reality is, China hasn’t played by the rules,” Willis said. “There’s no doubt about that. The president wants to hold them accountable for that. The question is does he have a plan to get us out of this?”
Willis says if the Trump administration can’t come up with a plan within the next 60 days, the people who will be hurt by this trade dispute are the farmers.