Citing a $10 billion loss in U.S. agricultural exports to China in 12 months, the most recent tariff spat and a rapidly deteriorating farm economy, time and patience are in short supply for American farmers, according to the American Farm Bureau Federation (AFBF).
In a letter to President Trump, and administration members USDA Secretary Sonny Perdue and U.S. Trade Representative Robert Lighthizer, AFBF President Zippy Duvall said the prospect of additional Chinese tariffs and failure to score a trade win in closing the pending U.S.-Mexico-Canadian Agreement (USMCA) are only making a struggling farm economy worse.
“The trade situation has tested farmers’ and ranchers’ patience for more than a year now,” Duvall wrote. “We are patient people — we’re used to playing a long game. However, we need to have a win in sight.
“Otherwise, patience will soon run out.”
According to AFBF, U.S. agricultural exports to China declined by 50% in 2018, a drastic reduction for what had previously been a growing market.
“This is a dramatic reversal in fortune for U.S. agriculture,” Duvall said. “The U.S. exported almost $20 billion in agricultural products to China in 2017, making it the No. 2 export market for U.S. farmers and ranchers.”
Duvall noted that after decades of work to develop the market, China trade grew from 2% of total U.S. ag exports in 2000 to 16% in 2017 — an increase of 87% that outpaced the overall 64% growth in U.S. agricultural exports.
That all changed with the start of the current trade war a little over a year ago at a time when prices for some crops already were at their lowest level in decades. Duvall said the most recent escalation in tariffs with China only adds insult to injury for U.S. agriculture.
“It is especially painful because of recent hope that the U.S. and China were close to agreeing on a deal to resolve the trade disputes,” he said. “This new round of tariffs seems to throw cold water on those hopes — but as long as the two sides keep talking, there is the chance of an agreement.”
Duvall also called for continued trade focus on opening other markets by approving the USMCA, continuing talks with Japan and insisting that agriculture is included in negotiations to reach a new trade deal with the European Union.
“While it is nearly impossible to replace a market as large as China’s, expanding other markets for agriculture around the world certainly would help,” Duvall said, adding the organization supports efforts to improve trading opportunities.
“The solution, however, is not more tariffs,” he said. “We ask that your trade negotiators make a deal as soon as possible to end the tariffs that are slashing our exports, destroying a once-promising market for agriculture, worsening the farm economy, and contributing to high levels of stress and uncertainty for many farm and ranch families and other Americans whose jobs are connected to agricultural production.”
According to the AFBF, it’s grateful for the Trump Administration’s 2018 Trade Aid Package, which helped many farmers, but asks that similar trade aid packages continue as long as needed to help producers weather the economic impact of trade disruptions.
“Mitigation payments can never replace lost markets,” Duvall said. “America’s farmers and ranchers depend on growing and stable export markets. Our agricultural trade surplus previously has been a tremendous success story for the U.S. We hope to return to that success for agriculture and our country.”