Washington, DC – The chickens are already coming home to roost. That is the stark message that came out loud and clear on the Hill this week during a Congressional hearing on “The Effects of Tariffs on US Agriculture and Rural Communities.”
Focusing on the effects on US agriculture and rural communities of both the US tariffs imposed under Sections 232 and 301 as well as retaliation imposed by other countries against the US exports, Congressman Dave Reichert, Chairman of the Ways and Means Subcommittee on Trade, said that “US farmers, ranchers and growers right now are caught in the middle of international crossfire.”
“Adding insult to injury, they are the first to face retaliatory tariffs from across the globe as countries react to the US trade policy decisions. In fact, the US agriculture is now facing retaliatory tariffs from the EU, China, Mexico, Canada, Turkey, Russia, and India,” Reichert said.
American farmers, he said, are hurt because products, such as equipment, chemicals and fertilizer, which they need to run lean and competitive agriculture operations have been included on the administration’s Section 301 list, as well as the steel and aluminum they need. To stop these adverse impacts on US agricultural products, he urged the Trump administration to take steps to protect the interest of American farmers.
“Low commodity prices have made the last several years very challenging for many American farmers. And what we’re hearing from farmers, ranchers, producers and fisherman in my home state of Washington, and many other states across the country, is that US agriculture just isn’t in a healthy place,” Reichert noted.
The Trump administration’s decision in March to impose tariffs on aluminum and steel imports has triggered a trade war with several countries including China, which has announced retaliatory measures.
In April, Trump imposed an additional import tariff on some 1,300 Chinese products worth USD 50 billion and directed to look into another round of additional tariffs worth USD 150 billion. China was quick in drawing up trade retaliation options against the US.
India last month submitted a revised list of 30 items — including motorcycle, certain iron and steel goods, boric acid and lentils — to the WTO on which it proposes to raise customs duty by up to 50 per cent.
Reichert said that in his home state of Washington, one winery has already lost $500,000 in export sales after China imposed a tariff in retaliation for the Section 232 tariffs, and their shipments dropped by 50 per cent in the second quarter alone.
In another sector, the US Department of Agriculture reported that China cancelled nearly $140 million in soybean contracts at the end of June. Cherry producers are really feeling the pinch during their short cherry season, as they face an additional 25 percent tariff in China, their top export market, he added.