Iowa Senator Offers Thoughts on Trade, Protecting Farmers

U.S. Senator Charles Grassley (R-Iowa) expects the next six months to be “very fluid” for agriculture and trade.

In a recent Capitol Hill Report, Grassley explained it will take that long for proposed tariffs to kick in. It will also take that long to get a true picture of how those tariffs, and the resulting backlash, will affect agriculture.

“President Trump is approaching this like he did as a businessman,” Grassley said. “This is how he operates. He negotiates by pushing things to the brink.”

Will that brinkmanship work?

“If all goes well, we have nothing to worry about. If not, there is plenty to worry about.”

On the surface is an impending trade war with the potential for China-imposed tariffs on pork, soybeans, sorghum, corn, beef, and other products. Under the surface is the U.S. effort to force Beijing into opening its markets and curtail China’s subsidies to cutting-edge industries like robotics and artificial intelligence.

Should the trade war escalate, the Trump administration has asked the USDA to step in with a safety net, including using the Commodity Credit Corporation, which could provide up to $30 billion to help shore up American farmers by buying their crops.

The CCC provides loans and payments to farmers when prices or revenues decline for major crops, including wheat, corn, soybeans, peanuts and rice, and it provides other types of support for dairy, cotton and sugar.

But using the CCC would add to the budget deficit, and it essentially amounts to a farm subsidy.

“Iowa farmers aren’t looking for another subsidy program; rather they want new and improved market access,” said U.S. Senator Joni Ernst (R-Iowa).

Grassley said there is a good chance the U.S. may strike a favorable position to renegotiate NAFTA, and Trump has indicated he may be willing to reverse his stance on the Trans-Pacific Partnership (TPP).

“The president is interested in negotiating better results for the U.S.,” Grassley said. Farmers would benefit from increased market access if such a deal is possible.

Grassley said there is a possibility the U.S. may be able to negotiate a separate bilateral trade agreement with just Japan, one that could mean three or four times the trade dollars that all the other 10 countries in the TPP bring to the table collectively. “That would more than compensate for the TPP,” he said.

Grassley is a member of the Senate Agriculture Committee.

Source: Successful Farming