Shipley extends POTUS invitation to visit farm, talk trade04/12/2018 | Soybean Exports, Soybean News, Weed Issues
By Matthew Wilde, ISA senior writer
Iowa’s political and farm leaders Tuesday urged President Donald Trump to resolve a brewing trade war with China before long-lasting economic damage is done.
With soybeans caught in the crosshairs, Iowa Soybean Association’s (ISA) Bill Shipley invited Trump to his Nodaway farm during planting to talk trade — president to president.
Shipley extended the offer during Gov. Kim Reynolds’ weekly press conference at the capitol in Des Moines. Reynolds, flanked by commodity, manufacturing and ag officials, devoted the time to discuss the U.S.-China trade dispute and the impact on Iowans.
China threatened last week to impose a 25-percent tariff on U.S. soybean imports in response to proposed U.S. tariffs on Chinese imports.
"I would like to invite President Donald Trump to my farm to see us planting soybeans this year — to see what goes into production, how we do it and what we’re going to do,” said Shipley. “It’s a huge, valuable export for the United States.”
The media reported the invitation and tweeted it to the president. While it’s unclear if Trump will visit Shipley’s farm, there’s no denying the importance of U.S. soybeans to its top export customer.
China purchased nearly 1.4 billion bushels of soybeans from the U.S. last year valued at $12.4 billion, according to government data. The United States’ market share is nearly 40 percent.
Once a net soybean exporter, China is now the world’s largest buyer. The U.S. soybean industry, farmers and checkoff programs contributed to the meteoric rise in Chinese purchases by building relationships with buyers and government officials and providing livestock feed and nutrition training.
Shipley is concerned a trade war will reduce sales, prices and damage friendships decades in the making.
“We’ve worked on trade with the Chinese for more than 35 years,” Shipley said. “I would hate to see those relationships go by the wayside.”
ISA’s president said farmers recognize there are legitimate trade issues that must be resolved between the U.S. and China. Including intellectual property rights, requirements placed on U.S. companies wanting to do business in China and the trade deficit are at the heart of U.S. tariff actions.
In late March, Trump placed import tariffs of 25 percent on steel and 10 percent on aluminum to protect national security and bolster domestic production. China is the largest manufacturer of both, with exports to the U.S. valued at $3 billion. China retaliated with $3 billion in tariffs on U.S. pork, ethanol and other products.
Last week, the U.S countered by proposing to slap 25 percent tariffs on 1,300 Chinese exports worth $50 billion as punishment for unfair trade practices. China countered with $50 billion of tariffs on U.S. goods that included soybeans, corn and beef. Trump also announced another $100 billion in tariffs is a possibility.
Trade wars involving food, Shipley said, are a lose-lose proposition.
A recent Purdue University analysis projected a 30 percent Chinese tariff on U.S. soybeans would eventually reduce imports by 71.2 percent, total U.S. soybean exports by 40.3 percent and prices by 5.2 percent. The economic welfare of the U.S. and China would suffer by $3.3 billion and $2.6 to $8.4 billion, respectively.
"The Iowa Soybean Association urges U.S. and Chinese officials to pivot from the politics and posturing to resolve this escalating trade dispute for the benefit of American farmers and our Chinese customers,” Shipley continued.
Time to act
Reynolds said the proposed tariffs on soybeans and most other agricultural products won’t go into effect for at least 60 days. She’s making sure the Trump administration knows how vital trade is to the state. Iowa exported $13.2 billion in goods last year and one in five jobs depend on trade, Reynolds said.
“We continue to urge the administration to engage with leaders on both sides to pursue thoughtful, reasonable and effective agreements through diplomatic channels without escalating into a trade war,” Reynolds said.
On Tuesday, the governor talked to her predecessor Terry Branstad, now U.S. Ambassador to China. Branstad asked her to pass along to Iowans that his team is “working every day on a positive outcome for our country, agriculture and American businesses.”
Reynolds also discussed trade with U.S. Secretary of Agriculture Sonny Perdue and Mick Mulvaney, the president’s director of the Office of Management and Budget.
“Iowans have benefited from our long-standing relationship with China by establishing new and expanded opportunities for ag commodities, feed ingredients and agriculture equipment, Reynolds said.
“That’s why escalating tariffs are concerning,” she continued. “I understand the administration is working to unwind decades of bad trade policy … but farmers tend to be early targets in trade disputes and markets have reflected that uncertainty.”
If a full-scale trade war erupts between the U.S. and China, Perdue assured Reynolds that farmers would be, at least in part, compensated for losses. No specifics were given.
Trump tasked Perdue and the U.S. Department of Agriculture (USDA) to come up with a plan. Perdue successfully appealed to appropriators to lift a prohibition on USDA’s authority to make emergency assistance payments under what are known as Sections 32 and 5.
According to Agri-Pulse, a source familiar with Perdue’s request said ending the restriction allows Perdue to potentially make up to $15.3 billion in payments.
“They (government officials) are working through details so I’m not at liberty to share at this point,” Reynolds said. “The president said farmers are great patriots and he will make it up to them.”
Iowa Pork Producers Association President Gregg Hora said Iowa’s pig farmers remain hopeful a solution can be reached and they can impact an outcome everyone can be proud of. The Webster County pig and row crop farmer said hog prices have declined since China announced tariffs on pork.
Iowa shipped more than $48 million in pork to China in 2017. More than one-quarter of the nation’s production is exported.
Hora said China imports “pork variety meats” that aren’t popular in the U.S. like ears, feet and jowls.
“This has a significant impact on pork processors and the prices we receive,” he said.
When a reporter asked farmers what government aid they would like if trade-dispute losses escalate, Hora simply said, “open relationships with trade to move excess pork and soybeans.”
Iowa ag manufacturers are feeling the effects of the trade rift between the U.S. and China.
Steve Sukup of Sukup Manufacturing said steel prices have increased 40 percent. The Sheffield grain storage company, which employs 600 people, increased bin prices 20 percent as a result.
So far, he said no orders have been cancelled.
“Our fear is a trade war will put jobs on the line,” Sukup said. “There hasn’t been a trade war the U.S. has won. Iowa farmers and employees have the most to lose.”
Iowa Secretary of Agriculture Mike Naig encourages farmers to join the state’s political leaders in lobbying the Trump administration to increase trade and tear down barriers.
“I do think Iowans can have an impact,” he said. “Think of where we are in the national landscape in terms of ag trade — No. 2 in the nation in the value of exports. If not us, who would convey this message?”
Contact Matthew Wilde at firstname.lastname@example.org.
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