i3 - March/April 2019 - 35

Policy

business. You must do a large volume to
make any money and if you cut that margin
down even slightly, you can put farmers out
of business. Farmers are being squeezed
in two ways. First, the largest soybean
customer for the U.S. is China. We export
most of our soybeans to China each year,
and they use them for feed for livestock.
U.S. exports of soybeans to China are
down 96 percent because of the trade war.
Our barges are full, there are stockpiles
in barns, there are literal mountains of
soybeans rotting in fields because there is
nowhere to ship them. So, if you're a soybean farmer, you're getting a lower price
for your product and you're having a hard
time making your loan payments. Banks are
foreclosing on soybean farmers and that's
only half of the equation.
The other half is your input costs. If you're
buying a tractor, the tractor is more expensive because of trade war tariffs. If you want
to use a drone, the drone is more expensive
because of the trade war. Farmers are getting squeezed on both ends.

Q Does that open an opportunity for others

to step in and compete with farmers?
It absolutely does. The biggest U.S. competitor for soybean sales is Brazil. Typically,
we'll ship soybeans one part of the year
and they ship another part of the year, but
the trade war with China has cut down the
number of soybeans China is purchasing from the U.S. - that 96 percent drop.
Instead, China bought stockpiles from
around the world and if they make it to
the spring, they can start buying Brazilian
soybeans again. The U.S. farmer basically
is going to miss an entire sales cycle. One
of our big concerns is that once those
trade relationships shift - once Brazilian
soybeans become the norm in China - its
going to be hard to get those markets back.

A

to 52886, where you can sign up for our
updates and send messages to your members of Congress. You can also follow us at
@FarmersforTrade.

Q How do you see the tariff situation
playing out?

A There are already a lot of tariffs in effect

- tariffs on steel and aluminum are coming
in from all countries, along with tariffs on
inbound products from China. The first two
rounds of tariffs on China capture intermediary
products. A lot of engines and widgets that
we use in manufacturing - those are at 25
percent. The third round at 10 percent is more
consumer products. So, you're paying more
for products imported from China because
of this trade war. Those 10 percent tariffs may
go up to 25 percent. Our hope is that the U.S.
and China will work out a trade agreement
and won't escalate the trade war, but a lot
depends on what happens before March 1 -
the date 10 percent is set to go to 25 percent.

Q

What is the potential long-term damage
from tariffs and shifting markets?
A The long-term damage could be catastrophic. You've seen how the stock market
is swinging - a lot of that is because of
trade. In fact, if you look at some of the
stock market swings, with good news on
trade, you see the market go up. When you
hear about tariffs, the market goes down.

It's following the trade war very closely. So,
you have the immediate possible impact
of going into a global recession, but you
also have disruption of trade relationships.
There are manufacturers who have gone out
of business or, ironically, they are moving
production overseas because it is cheaper
for them to manufacture where tariffs are
not placed on their inputs. And once those
factories leave the U.S., they are gone.

Q How is this tariff situation bringing industries together to work more closely?
If there is a silver lining that's it. If you
work in technology, you understand the
importance of global supply chains. Part
of what we need to do is to explain how
trade works. Part of the silver lining is that
FFT, CTA, the National Retail Federation,
the National Marines Manufacturer
Association, and 200 companies and
associations are working together to
educate people about trade and why it's
important to our economy.

A

Q How optimistic are you that this issue
will be resolved?
A I am 50 percent optimistic. We're going
to resolve this issue, but the question is
how quickly and how much damage will
be done before we get it resolved. In the
meantime, real families and real businesses are being hurt.

Ipopba/Getty Images

Q How are you getting the word out?
A We're doing a lot of things. Farmers for

Free Trade is working in partnership with
a large group of businesses - not just
agriculture but others like CTA, the National
Retail Federation and the National Fisheries
Institute - to raise awareness about trade
and how important it is to the U.S. economy. We're holding town hall events all over
the U.S. and we're at conferences talking
about trade. One easy thing you can do if
you care about trade is text TARIFFSHURT

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MARCH/APRIL 2019

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http://CTA.tech/i3
i3 - March/April 2019

Table of Contents for the Digital Edition of i3 - March/April 2019
