After President Trump announced plans to levy tariffs, which basically serve as a large tax, on a quarter of all Chinese products, China responded that it would, in turn, impose penalties on American food and agricultural products that are exported to China, including several that are produced in Delaware. While we agree with President Trump that we need to stop China’s unfair trade practices, and we are encouraged that he wants to take action, we are concerned that applying these specific tariffs will hurt Delaware farmers and all American consumers who rely on their products.
Thankfully, we’ve so far been able to avoid further threats of escalation, but we have to be very careful in the weeks and months ahead to ensure that we don’t find ourselves in an all-out trade war that would ultimately benefit no one. Instead, we should direct our efforts toward clear policy solutions that benefit everyone involved, especially American workers, manufacturers, and growers.
Specifically, a trade war with our largest agricultural customer, China, has the potential to cause a great deal of damage to the agricultural sector here in the United States. For example, American soybean producers rely on China for more than half of their total foreign sales. In 2016 alone, China purchased $14 billion in American soybeans, so proposed Chinese tariffs would be a real problem for our farmers, who, even if they sell the soybeans here in the U.S., rely on a strong export market to maintain prices. In fact, last year, Delaware was one of nine states to break a record high yield for the soybean harvest, so these tariffs couldn’t come at a worse time.
But it’s not just soybean farmers. The entire agricultural economy would suffer from back-and-forth hostile trade actions between the United States and China. Family farmers who produce corn, grain, and livestock would be negatively impacted, and if the situation escalates, potential Chinese tariffs on aluminum and steel would also hurt the agricultural community by raising prices of farming equipment like trucks, machinery, and irrigation systems.
The same goes for the dairy industry, already dealing with all-time low prices for dry whey, milk, hard cheese, butter, and dry milk products, and the poultry industry, which is on the cusp of finally gaining access to Chinese markets. Those industries have enough issues to deal with without contending with a hostile China.
The bottom line is simple: at a time when family farmers’ profits are razor thin, we simply cannot afford to risk an escalating trade war with China.
Our trade relationship with China, though, isn’t the only one we need to manage carefully. After China, Canada, and Mexico are our second and third largest agricultural trading partners, respectively, and both are extremely important to the American poultry, fruit, and vegetable industries.
The mid-Atlantic region has particularly close trade relationships with Canada and Mexico – the Port of Wilmington is the largest gateway for fresh fruit and juice concentrates, and the fruits and vegetables that Delaware family farms produce, including sweet corn and watermelon, ship as far north as Canada – and our region deserves access to open markets in those countries through the North American Free Trade Agreement (NAFTA). So, as the President and Administration officials look at ways to improve NAFTA, we need to be sure that we don’t make changes that will harm farmers here in the mid-Atlantic.
Delaware is part of a vibrant regional agricultural community that has a significant impact on our economy. Last week’s annual Delmarva Poultry Industry dinner brought over 1,000 people together to honor both partners in the community and outstanding growers, and served as a reminder of the dedication our farmers have to feeding the world starting at home.
We owe it to our family farmers in Delaware and farmers throughout the country to set smart, responsible trade policies that foster economic growth with our agricultural trade partners. Trade wars, on the other hand, are bad for the global market, and worse for the local farmer. We can do better.