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Congress mulling bills to take control of Section 232 tariffs
 

By RACHEL LANE

WASHINGTON, D.C. — Two bills in Congress may lead to the removal of Canadian and Mexican retaliatory tariffs on U.S. agricultural products.

President Donald Trump imposed Section 232 tariffs on Canada and Mexico steel and aluminum. The specific tariff is cited for national security, but a bipartisan group in the House and Senate think the steel and aluminum industries do not qualify for national security tariffs.

The two bills, the Bicameral Congressional Trade Authority Act and the Trade Security Act, have versions in both chambers. The bills would require Congress to approve any Section 232 tariffs.

Sen. Pat Toomey (R-Pa.) said about 3 percent of the steel used in the United States is a national security issue. The U.S. produces enough steel each year to more than meet the need for security.

During a meeting last week for Tariffs Hurt the Heartland (THH), it released a report stating nearly 1 million Americans will lose their jobs if the tariffs increase again on March 1, and this will cost the average family of four about $767. The tariffs will impact imports on the auto industry and all Chinese imports.

“Our hope is that the administration understands they are playing with fire. It's time for the administration to take tariff increases off the table for good, end the threat of new tariffs and finally bring an end to the crippling tariffs we are facing right now,” said Dr. Charles Boustany, a former Congressman and spokesman for THH.

He said the grassroots effort to get the heartland community to talk and share their stories with members of Congress has been a success and plays a large part in both chambers introducing bills to address security tariffs. The report states that every state will lose jobs, the national gross domestic product (GDP) will decrease and it will take years for the economy to recover.

If all the tariffs the Trump administration is threatening to impose go into effect, 2.2 million U.S. jobs would be lost and the average family of four will pay $2,389 more for goods and services every year, the report said.

Richard Wilkins, president of the Delaware Farm Bureau and a soybean farmer in Greenwood, Del., spoke during the meeting. He said he and his wife worked hard and sacrificed for years to be able to buy their first farm. Now his nephew works for him full-time, his retired brother works on the farm part-time to supplement his income and his mother is reliant on him for support.

“We're just trying to avoid bankruptcy until we can retire,” Wilkins said.

In the past few years, his net farm income has decreased about 50 percent. Last year, the tariffs on soybeans caused the value of his soybeans to decrease about 20 percent.

The decreased costs aren't isolated to the crops with tariffs, he said – buyers for other crops know farmers are more likely to diversify their crops this year and are offering lower rates for other crops, too, he explained. “Buyers don't have to offer as high a price for crops they want me to grow because the alternative – soybeans – is less attractive.”

Wilkins thinks the soybean market may never recover. In an effort to reduce costs, Chinese hog farmers have decreased the amount of soy mixed into pig feed and discovered they didn't need as much soy as they had been using, he said.

Since China did not buy as much soy from the U.S. as normal, there is still about 28 percent of last year's crop in silos. The excess supply will hurt the soybean market for years to come, he opined.

He said he spoke with government representatives and he feels they delayed the tariffs as long as they could last year, but at the same time, representatives from the administration have offered everything from sympathy, to the expectation that American farmers should be patriots and suffer to support its goals.

Sen. Ron Johnson (R-Wis.) said the U.S. has been magnanimous about trade with other countries and has been taken advantage of as a result. The administration is trying to reset trade and it's a goal Johnson shares, but he is concerned about the strategy.

There have been clear benefits to the steel industry in this country, but the impact on a diverse field of industries has not been studied. Johnson said he's given case studies to the administration repeatedly, stories of how the tariffs are impacting businesses outside of steel producers.

“People who are being harmed by these tariffs need to step forward and provide the details so we can provide them to the administration and encourage them to finish these trade deals as soon as possible,” he explained.

The damage to other industries so far has been masked, he said, because companies have been able to use stored inventory to fill orders, but that won't last much longer. Using tariffs to bring people to the table has worked, and the administration said the tariffs on steel and aluminum on Canada and Mexico would be removed after the replacement for NAFTA was signed – but Johnson noted it hasn't happened.

“Go to China as a global group and have a stronger position,” he said, adding the U.S. should be working with allies, and not trying to take on China and every other country by itself.

2/13/2019