Federal lawmakers are looking at ways to get another round of relief funds to U.S. farmers following escalation of President Donald Trump’s trade war with China.
U.S. Sen. Pat Roberts, R-Kan., was asked by reporters Tuesday how much patience exists among farmers concerning the trade standoff and he held his thumb and index finger an inch apart. Kansas farmers have spent the last year reeling from Trump’s hardline tactics, and while they’ve supported his effort to get a better deal with China, some are reaching a limit.
"It's dire straits," said U.S. Rep. Roger Marshall, R-Kan. "It's dire times for farmers. The stories I hear from people would literally make you want to cry."
Kansas farmers, meanwhile, would rather see trade deals finalized than take an aid plan. But they may need help as crop prices continue to plummet.
“Prices are lower now than they were last fall," said Reno County farmer Cameron Peirce. "Much lower.”
With the increases imposed Friday, the U.S. has now placed a 25 percent tariff on $250 billion worth of Chinese goods. China answered with import duties on U.S. goods since, since America enacted its first tariff in July 2018.
China’s retaliation has focused heavily on agricultural goods, driving down already low commodities markets for U.S. farmers.
In an effort to support farmers through the trade war, the president previously ordered a tariff relief package totaling $12 billion. That was doled out through several programs, including the Market Facilitation Program, by the United States Department of Agriculture. The relief money was aimed mostly at pork and soybean producers, who have been hit hardest by the trade war, but now other producers, including wheat and corn growers, are seeing increased effects.
Trump has suggested another such package, potentially reaching $15 billion this time. He said Monday how the relief plan would work was still being “devised."
"I've not had one farmer ask for a handout," Marshall said. "They want access to markets."
Marshall said ratification of the USMCA, or NAFTA 2.0, is more important than negotiations with China. Marshall said he is hearing from Kansas farmers who expect to lose up to $200,000 this year, and spoke to a banker recently who was processing his seventh farm-related bankruptcy of the year.
As a farmer, Peirce said he’s not in favor of an additional bailout. But he added farmers may need the assistance if prices continue to be dictated to them without a trade deal or access to open markets.
“I feel like there are many of us that would have had real difficulties paying our bills if it weren’t for the MFP payment,” Peirce said.
But some Kansas farmers see the aid, while helpful, as an excuse. McPherson County farmer Adam Baldwin said while another aid package would take away some of rural America’s short-term pain, it does nothing to help the long term structural damage being done to the U.S agricultural export markets.
“While temporarily easing the pain in rural America, the real purpose of the payments is to take political pressure off of our legislators so they can get by with statements or tweets of concern instead of working on actions that would help the situation,” Baldwin said.
Some believe that China has to buy U.S grain, so it is just a waiting game, but Baldwin thinks that conception is false. He used China to illustrate how tariffs on U.S. grains could incentivize purchasing from other production areas that wouldn’t be able to compete if the tariffs were not in place.
“China had a domestic corn policy that was protectionist and created a high base price for domestic corn and a high tariff rate for U.S. corn,” he said. “As a result, Chinese end users started to import sorghum, and they soon found they preferred feeding sorghum… The tariff forced a shift in the supply chain.”
Further delays hurt the agriculture industry, but Baldwin said if a deal is not going to be made, it would be better to call trade talks off until after the 2020 election. That’s not desirable, he said, but it may allow the futures market to find some stability and not make large reactions to “unneeded presidential tweets.”
Ideally, like Peirce and others, Baldwin would like to see an unrestricted market.
“Farmers want to grow what the market forces them to grow and sell our goods to the buyer who can afford to pay us the most with as little government interference as possible,” he said. We want markets and policy that allows us to plan, not be punished or rewarded by a presidential tweet.”
Kansas lawmakers agree across the aisle. U.S. Rep. Sharice Davids, D-Kan., agreed with Marshall that trade deals needed to get done.
“I’ve met with farmers, ranchers, manufacturers and agribusinesses across Kansas, and it’s clear that they are the ones paying the price for President Trump’s destructive trade war with China,” Davids said. “If the President wants to help farmers, he should begin by reaching a deal to bring stability back to our agricultural communities and economies.”
Trump has been conflicted on how long a trade deal will likely take, saying that it could both take years or may be finished next month. While farmers have been largely affected, U.S. tariffs have put a strain on manufacturers and other businesses that have to pay increased prices for materials imported from China, and have even begun spilling over into rural communities.
"It's just not with the farmers. It's Main Street," state Sen. John Doll said. "I was just visiting yesterday with an implement dealer, and he said it's just been like he's never seen it before. As a consequence, it's trucks not being sold. Which, in turn, will hurt our sales tax. The unintended consequences are bad and the longer this goes on, the worse it's going to be."
In an effort to provide some relief, U.S. Sen. Jerry Moran, R-Kan., wants to establish an exclusion from the third round of U.S. tariffs.
“Until this trade war is resolved, it is critical that American manufacturers and businesses have the opportunity to apply for an exclusion from the tariffs, and as chairman of the Commerce, Justice, and Science Appropriations Subcommittee, I secured a commitment from U.S. Trade Representative Lighthizer to establish an exclusion process for the third round of tariffs on China,” Moran said. “I am working with USTR to make this exclusion process available as soon as possible, and I will continue to utilize my role on the Senate Appropriations Committee to work toward lasting solutions to these ongoing tariff battles.”
Lt. Gov. Lynn Rogers, who leads a rural development office for the governor, said the broad agriculture economy in Kansas was suffering from years of low crop prices, rising operating debt, uncooperative weather and the ongoing international trade conflict.
The Kansas congressional delegation, with five of six members in the Republican Party, need to speak with a louder voice to the GOP administration of President Donald Trump that tactics reliant on tariffs was deepening the challenge faced by Kansas communities, he said.
"I think it would make a difference if our legislators would stand up and say how much this is impacting us," Rogers said. "Unfortunately, it's going to hurt the whole state. Not just individual farmers."
Contributing: Sherman Smith and Timothy Carpenter reporting from Topeka; Damian Paletta, Erica Werner and Taylor Telford of The Washington Post.