Proposed Chinese Tariffs Will Hurt Ag
With 95 percent of the world’s consumers living outside the U.S., free and fair trade in the international market is vital for American producers to thrive and grow. With approximately one-fifth of U.S. agriculture products going to foreign markets, our farmers and ranchers, in particular, benefit from positive trade agreements.
China recently unveiled a proposal to impose an additional 25 percent tariff on more than 100 U.S. goods, including soybeans, wheat, corn and beef, and it has already begun imposing increased tariffs on pork products. This is in response to recent actions by the administration to impose sanctions and increase tariffs on certain products coming into the United States. China is one of our biggest customers of soybeans, buying more than 60 percent of U.S. soybean exports each year. In South Dakota, we produced more than 241 million bushels of soybeans in 2017, many of which were purchased by China. Increased tariffs on soybeans and other U.S. products would be devastating to our already-struggling ag economy.
While I support the administration’s desire to negotiate better trade deals, I’ve continuously expressed my concern about retaliation from other countries. The new tariffs China is proposing on soybeans and other U.S. goods is a prime example. South Dakota farmers are rightly concerned about this announcement. As trade negotiations continue between the U.S. and China, I will continue to look at all avenues to prevent these proposed tariffs from becoming a reality.
I understand there is some time before these tariffs are imposed to allow for negotiations; however China’s tariff proposal is already having a real market effect. For example, every 10 cent drop in the soybean market represents a loss of $24 million to South Dakota soybean producers. When the Chinese announced the proposed tariffs, the market dropped 30 cents – a scary statistic for farmers about to start planting.
As the administration continues to negotiate trade deals, I encourage them to take both short and long-term implications into consideration. The best way to strengthen our negotiating position with China is to re-engage with trading partners in that region, specifically those in the Trans-Pacific Partnership (TPP). This will give us a tremendous advantage as we seek the best deal for South Dakota producers.
Earlier this year, I sent a letter to the president urging him to re-engage in TPP negotiations. Increasing engagement with the eleven TPP countries could greatly improve the competitiveness of U.S. businesses, including farms and ranches. Increasing access to a region and market that has a population of nearly 500 million—and growing—is a smart move for our country.
Free and fair trade drives down prices for American consumers and creates jobs here at home. We need to be creating and strengthening trade deals with our allies, including those in the TPP and the North American Free Trade Agreement (NAFTA). This will both expand our opportunities and strengthen our hand in negotiations with China. Over the past year, we’ve been able to substantially grow our economy through tax relief and regulatory reduction. As we continue to build on that success, we must open up new markets to U.S. products without hurting existing trade partnerships. Actions impacting our existing trade partnerships will negatively impact our economic growth.
I will continue working with my colleagues in the Senate to urge the administration to prioritize trade deals that benefit South Dakota businesses and our ag industry while also promoting positive trading relationships with our allies.
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