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Ohio farmers: How will Trump tariff news affect agriculture?

 

PIQUA, Ohio — There was a broad spectrum of topics covered at the annual Farm Forum at Edison State Community College in Piqua earlier this month. The event gives those involved in farming the opportunity to hear industry experts share updates in agriculture across the state, as well as nationwide.

Nothing stood out more on this day, though, than discussion about a possible trade war. President Donald Trump signed an executive order last Thursday to levy a 25 percent tariff on foreign-made steel and 10 percent on aluminum, to take effect late next week, excepting only Canada and Mexico.

Local farmers who attended the Ohio forum when the tariff was just a proposal earlier this month were wondering how it could impact the agricultural industry. Dave Brubaker, a grain farmer from nearby Sidney, struck a chord with most in attendance in asking, “How will other nations use U.S. agriculture to fight back against Trump’s new tariffs?”

“Great question,” responded host U.S. Rep. Warren Davidson, a Republican representing District 8. “It’s been an interesting week on that front and trade is on the top of the minds of a lot of folks, with good reason. Our country was really built because we were great at trade, so if you are going to make American great again, that would mean we trade with everybody.

“Countries such as China could retaliate against the tariff by not purchasing products such as soybeans. It could be very disruptive to our economy.” He said he was “very concerned” with the tariff announcement because “they are blanket tariffs.

“If you put a blanket tariff on everyone in the world for a commodity, you lay out a framework, but I assume that means that he believes anyone has free, fair and reciprocal trade with the United State of America. That’s not a good sign. He talked a lot about trade, so they are all loaded up and ready with their responses and it’s not going to be good for our agricultural commodities.”

Davidson’s response elicited much muttering among the crowd of 150 who attended that day.

“Soy prices will probably go down swiftly if that’s the case, out of Asia,” he said. “There will be other impacts across the markets and it will be very disruptive to our economy. So a lot of the good that has been done in the deregulatory space, with tax policy and everything else, I think will be swiftly damaged.”

Davidson said one of the most concerning statements he’s heard from Trump is “that trade wars are good and easy to win,” with which he said he “couldn’t disagree more.

“While within our party, generally, we try to have behind-closed-door private conversations, I think the time for those private remarks has passed, which is why I’m very direct and open,” he explained. “I think you’ll see a lot of members of Congress be just as direct and open about it. I hope we can do something better than what’s on the table right now.”

James Zehringer, director of the Ohio Department of Natural Resources (DNR), made a comment on how the tariff announcement could impact Davidson’s former family business, West Troy Tool & Machine. The company is now part of Integral Manufacturing, which has services such as metal stamping, plastic injecting molding, assembly welding, stamping dies and other products.

“It misses the mark on some of the abuses,” Zehringer said. “They miss the mark by a lot because not only is the tariff only on steel … somebody is just going to stamp the metal in Mexico and send them the component part. There’s not an afterthought about the component that is made out of steel.

“Aluminum wheels, for example, and beverage cans and all these kinds of things are going to be addressed by the tariff. They actually are potentially going to sell less steel.”

Davidson gave an example about electrical steel and China’s alleged theft of intellectual property to try to take the market away from U.S. companies like AK Steel. He said the tariff doesn’t address “the worst abuses.

“It is a very big miss in my opinion, especially from the opening salvo of a ‘trade wars are easy to win’ battle plan,” he said in a closing statement concerning tariffs.

In other topics, Zehringer urged farmers to work with the DNR and its resources to manage standing woods, water resources and wildlife located on their properties. He also touched on Ohio’s current hydraulic fracturing, or fracking, projects.

“The reason we are all having relatively inexpensive gas prices is because of what’s happening in eastern Ohio,” he said, noting newer technologies are being used. Zehringer cautioned property owners who are considering fracking to work closely with an experienced attorney.

Yvonne Lesicko, vice president of Public Policy of the Ohio Farm Bureau Federation and forum moderator, touched on the importance of trade.

“Trade is hugely critical to farmers in the U.S.,” she said, adding that recent movement in Washington to renegotiate the North American Free Trade Agreement could affect the state’s ag producers. “It’s critical the ag component of NAFTA remains intact, sharing a visual that in Ohio ‘every third row’ of corn or soybeans and ‘one day a week’ of product from the state’s dairy farms are shipped outside the U.S.”

3/14/2018