Trade war could spark food fight

Steel and aluminum may be the intended quarry of a trade war that President Donald Trump has said would be 'good” for the U.S. economy. But the casualties of the conflict could be food, agricultural economists warn.

China, the European Union, Mexico, Canada and other trading partners have sent strong signals that they may retaliate if Trump succeeds in imposing stiff tariffs on imports of steel and aluminum.

Each of those trading partners is a major buyer of U.S. agricultural goods, which amass a surplus of about $21 billion from worldwide trade, according to the U.S. Department of Agriculture.

Iowa exported $1.2 billion worth of corn in 2017, for example, and $256 million, according to the U.S. Census Bureau.

In overall exports, Iowa sent $560 million worth of goods to China and $332 million to the United Kingdom in 2017.

'We could be in a really nasty trade spat, and we've seen that agriculture is usually a big target,” said Josh Rolph, manager of federal policy for the California Farm Bureau Federation. 'We are greatly concerned.”

The wheat industry, which has pushed for more open international markets, blasted the proposal Friday.

'It is dismaying that the voices of farmers and many other industries were ignored in favor of an industry that is already among the most protected in the country,” a joint statement from the National Association of Wheat Growers and U.S. Wheat Associates said.

Food frequently bears a steeper retaliatory penalty in trade wars. Agricultural products perish quickly, faster than politicians can argue. And while few people riot over the price of a smartphone, laptop or car, they've been known to overthrow governments over a food shortage or a spike in the price of staples.

The U.S. agricultural sector narrowly dodged an international food fight in 2015, when Canada and Mexico made plans to retaliate against U.S. wine, fruits, meat, cheese and dozens of other items over a dispute involving mandatory labeling of meat by its country of origin. But Congress quietly changed course.

The last time Mexico retaliated in a large way against U.S. trade policy was in 2009-2011, over the U.S. reluctance to allow Mexican trucks to cross the border, as required in the North American Free Trade Agreement.

The 90 retaliatory measures Mexico took carved an estimated $984 million out of U.S. exports to Mexico - half of that from lost agricultural sales, according to USDA economist Steven Zahniser.

Major farm and commodity groups have been reminding Trump since his inauguration that free trade has been very good for U.S. agriculture. Among the biggest sellers are soy beans, grains, dairy products, meat, nuts, hay, wine, fruit and vegetables.