Nation & World

Cargill sounds alarm over trade war

'Isolationism becomes the order of the day'

Cargill CEO David MacLennan (left) and Diamond V President Jeffrey Cannon are interviewed at the Diamond V headquarters in Cedar Rapids on Friday, Jan. 19, 2018. Diamond V has been acquired by Cargill. (Liz Martin/The Gazette)
Cargill CEO David MacLennan (left) and Diamond V President Jeffrey Cannon are interviewed at the Diamond V headquarters in Cedar Rapids on Friday, Jan. 19, 2018. Diamond V has been acquired by Cargill. (Liz Martin/The Gazette)

WASHINGTON — DeVry Boughner Vorwerk’s speech to global development experts in the nation’s capital last week was a call to action.

Global trade, said Cargill’s chief of global corporate affairs, can be a development tool that promotes the environment, education and equality. But only if people and organizations become activists willing to work with one another.

“Without our leaders sitting around the table together,” Vorwerk warned, “isolationism becomes the order of the day.”

Cargill, the Minnesota-based agricultural and shipping giant that has facilities in Cedar Rapids and is one of the world’s largest private companies, has emerged as a leading voice in support of global trade as President Donald Trump imposes protective tariffs on other countries.

Vorwerk spoke at the Devex 2018 sustainable development exposition three days after Trump broke with U.S. allies in the G-7 over tariffs that will sharply raise the price of U.S. imports of aluminum and steel from Canada, Mexico and the 28 countries of the European Union.

The president says the tariffs are necessary to rebuild the U.S. steel and aluminum industries for reasons of national security. He believes the levies will lead to an increase in American manufacturing jobs.

Retaliatory cycle

A few days after Vorwerk spoke, the president imposed 25 percent tariffs on $50 billion worth of Chinese products to punish that country’s theft of U.S. intellectual property and the forced transfer of U.S. technology to Chinese companies that do business with U.S. counterparts.

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China has threatened retaliatory tariffs, to begin Monday, on U.S. agricultural products that include products such as soybeans, corn and livestock, such as hogs.

With a possible trade war looming, Vorwerk called for a series of actions that the Trump administration opposes.

• Cargill wants the United States to return to the 11-nation Trans-Pacific Partnership trade agreement from which the president withdrew, saying negotiations with individual countries would render fairer deals for America.

• The company wants support for the North American Free Trade Agreement, which Trump has argued unfairly favors Mexico and Canada over the United States and jeopardizes jobs in this country.

• Cargill wants an end to the Cuban embargo, which the White House won’t agree to.

• A final recommendation — opening trade with North Korea — might play better since that country’s recent summit with the United States.

“When we (at Cargill) talk about trade, it’s not about any one administration’s view,” Vorwerk said in an interview after her speech. “It’s about what we believe.”

What Cargill ultimately hopes for, and what turned into an applause line for Vorwerk, is a return to a rules-based trading system overseen by the World Trade Organization.

There have been failures in the current worldwide trading system, Vorwerk admitted. There have been winners and losers. There is clearly room for improvement. But the way forward demands a structure.

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“Without the WTO,” Vorwerk told the Star Tribune, “the trading system is in chaos.”

On Monday, American Soybean Association Vice President Davie Stephens said in a prepared statement, “Adding additional export market uncertainty through an expected 25 percent retaliatory tariff on U.S. soybeans into China ensures that soy growers and the rural communities that depend on them will see the effects of this for years to come.

“As the largest importer of U.S. soybeans, China is a vital and robust market we cannot afford to lose.”

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