President Trump stopped in Wisconsin on July 12 to tout a new trade agreement he orchestrated with Canada and Mexico, portraying a rosy future for farmers. They’re “over the hump,” he said.
Less than three weeks later, he announced plans to impose a 10% tariff on $300 billion more in Chinese goods, prompting China to retaliate by announcing it would stop importing U.S. agricultural goods. So much for being “over the hump.”
The outlook for many farmers was precarious even before Trump announced the new China tariffs, some of which have been delayed until December. The Federal Reserve Bank of Minneapolis reported last month that Wisconsin’s exports to China fell by $134.3 million during the first four months of this year, down by 25%. Whey, a byproduct of cheesemaking, was among the goods hardest hit. Multi-generation dairy farms are closing across the state, with 449 dairy farms lost in the first half of 2019.
It’s hard to imagine things getting much worse for farmers, but they could if China’s refusal to accept U.S. agricultural commodities disrupts global supply chains, further depressing already-low commodity prices.
Doug Rebout, Wisconsin Corn Growers Association president and Janesville-area farmer, said he’s not surprised Trump continues to ratchet up the trade war, despite the negative effects.
“President Trump is not going to back down because he’s going to get a win. At least in his mind, he’s going to get a win. He’s not looking at who’s being hurt in the process,” Rebout told The Gazette.
Left on his own, Trump is likely to push the U.S. economy toward a recession. He needs to be restrained for the nation’s sake, and only Congress can do it. Congress can limit the damage the Trump administration can do to the economy. But it needs to act fast. If Congress waits until a recession, it will be too late for many farmers.
Congress’ first step should be to reclaim its trade authority and overhaul a law Trump has been abusing to advance his shoot-from-the-hip trade agenda. Congress should curtail Trump’s ability to claim a national security basis to justify tariffs. He has abused this tool in several cases, in particular with aluminum and steel tariffs imposed on U.S. trading partners, though some of these tariffs have been lifted.
A bipartisan bill introduced in the Senate would reform Section 232 of the Trade Expansion Act of 1962, which gives the president the ability to quickly respond to national security threats by imposing tariffs. The bill would shift some responsibility for evaluating these threats from the Department of Commerce to the Department of Defense, creating a more objective process to evaluate national security interests. The bill also would give Congress more oversight and allow Congress to disapprove any tariff through a joint resolution.
Congress needs to stick up for farmers, who have been misled by Trump’s “America First” policies. Farmers thought Trump was putting their interests first when he touted a crackdown on unfair trade practices, but his strategy involves sacrificing the
livelihoods of farmers, which is unacceptable.
The entire Wisconsin delegation, including Trump supporters Sen. Ron Johnson and Rep. Bryan Steil, should take control of the situation before it spirals out of control. They should stop Trump from doing further damage to the economy.