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Montana Ag Network: Producers worried about impact of trade war with China

Posted at 5:56 PM, Aug 06, 2019
and last updated 2019-08-06 19:56:06-04

BILLINGS — President Trump announced another round of $300 billion in tariffs on Chinese goods last week to pressure the nation into a trade agreement. In return, Beijing is focusing on rural America by placing tariffs on agricultural products, predominantly corn, soybeans and pork.

Spencer Chase, a Washington D.C. agricultural policy expert and managing editor of Agri-Pulse, explained how China is pressuring U.S. agriculture.

“China clarified their stance to the U.S. Trade Representative here this morning, and they're not necessarily suspending all agricultural imports,” said Chase. “They are removing any tariff exemptions that they had placed on U.S. agricultural products. That's something they've done as a sign of good faith during the negotiation. But, after the latest tariff escalation, that has been undone.”

While Montana's production of corn, soybeans and pork is relatively small, a prolonged trade war may have a trickle-down effect on all U.S. agriculture.

“A lot of that is going to have impacts on domestic prices here at home because a lot of U.S. corn is grown and fed to U.S. pigs,” Chase added. “Also, some things to watch. There are some wheat exports that go over there. Not a ton, but some. This is really going to have a wide-ranging impact on American agriculture.”

Data from the American Farm Bureau Federation shows that in 2014, U.S. agriculture exports to China exceeded $24 billion. From 2017 to 2018, those exports fell more than 50%, dropping to $9.1 billion.

The Montana Farm Bureau’s Nicole Rolf said agriculture has been patient during the trade spat but is starting to feel the effects. The bureau remains hopeful an agreement will come soon.

“Trade is very important to Montana's farmers and ranchers,” Rolf said. “Being able to export them and finding new markets is very important. Maintaining the markets that we have is also important. We recognize the importance of getting these trade agreements right. Also, getting a chance to level the playing field to make sure that in the long run we're able to maintain markets. While at the same time ensuring trade is fair for farmers and ranchers and for the United States as a whole.

Agriculture is hopeful that if Congress ratifies the U.S. Mexico Canada Agreement and strikes a new trade deal with Japan, that China will be compelled to end the trade war.