Government

Trade war with China will be felt in Iowa

Dispute shows need to open new markets, ag hopefuls say

FILE PHOTO: Security guards walk in front of containers at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song/File Photo
FILE PHOTO: Security guards walk in front of containers at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song/File Photo

China’s vow to retaliate against President Donald Trump’s announced $50 billion worth of tariffs in the “same scale and the same strength” will be felt acutely in Iowa’s soybean fields and hog lots.

“The tit-for-tat is real,” Brooklyn farmer Craig Lang said, adding he’s concerned about the impact tariffs will have not only on Iowa farmers but the state’s economy.

Lang is one of five candidates who will try Saturday to persuade delegates to the Republican Party of Iowa to nominate them to be the state’s next Secretary of Agriculture. None of the five — Lang, Mike Naig, Dan Zumbach, Ray Gaesser and Chad Ingels — received the needed 35 percent of the vote in the primary election, so the decision will be up to delegates who will meet at the Iowa State Fairgrounds in Des Moines.

After Trump announced Friday he’d impose $50 billion worth of tariffs on Chinese products, Beijing announced it would do the same to the United States beginning July 6.

The products it said it would impose the 25 percent tax on include soybeans and pork.

According to estimates from the Iowa Farm Bureau, Iowa farmers sold nearly $2.3 billion in soybeans and $217 million in pork to China and Taiwan in 2015.

Although a $50 billion trade war with China amounts to three-fourths of 1 percent of the nation’s GDP, “guess where that all falls?” Lang asked. “Right here in the center of Iowa, and maybe some fruit and nut growers in California. We’re carrying the entire weight.”

Mike Naig, who was appointed ag secretary by Gov. Kim Reynolds earlier this year, Friday called for a quick resolution of the trade dispute “in a way that doesn’t place a disproportionate share of the retaliation on those of us in agriculture.”

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It’s not just farm products that are affected, Naig said, but intellectual property issues, market access, technology transfer requirements and biotech approval delays that impact farmers and businesses.

Farmers want free and fair trade, but Ingels, of Randalia, doesn’t believe Iowa farmers have been getting a fair deal with China all along.

“I support President Trump’s actions at this point to get us a better deal in the future,” Ingels said. That may put Iowa pork and soybean producers in a difficult situation for a time, but “I really believe the president is trying to get a better deal for American farmers and manufacturers in the long run.”

Zumbach, who farms near Ryan, said the United States has been on the losing end of trade with China for years “and this arrangement is no longer sustainable.”

“As chairman of the Senate Agriculture Committee, I met with a trade delegation from China to learn more about the wants and needs of both countries,” he said. “Not only do we have a willing buyer and a willing seller, but Iowa is well-known overseas for its safe and reliable agricultural products.”

However, with farm income forecast to be lower for the fifth time in six years, Democratic ag secretary nominee Tim Gannon said “the market uncertainty Chinese tariffs on our beans, pork, corn, beef and other agricultural products will mean real pain for Iowa farmers and will ripple through the economy. The pain will be shared by the implement dealers, factory workers, seed sales businesses, and others on Main Street who depend on a strong ag economy.”

A trade war of any length could upset the markets Iowa has developed with China, Lang said.

“We were becoming the primary provider of pork to China, but now we will be the residual provider,” he said.

It’s estimated that Iowa pork producers already have lost $2.2 billion in potential sales.

The eventual Iowa ag secretary along with “farmers, commodity groups and agriculture advocates need to be a part of this trade discussion, and deserve a seat the table as we continue to negotiate for a better deal,” Zumbach said.

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The trade dispute “is a good reminder that we need to continually market our products to new countries and consumers at all times,” Ingels said. “The secretary should work with all the commodity groups to continue to build diversified markets around the world,” he added.

Lang also would advise farmers, commodity groups the governor and lawmakers to develop new markets because “we can’t rely on a single destination” for Iowa commodities. “They have to be processed, they need to be boxed, they need to be marketed, so we keep that part of the consumer dollar in Iowa.”

l Comments: (319) 398-8375; james.lynch@thegazette.com

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