Long-Term Problems May Be Ahead
By Jessica Theisman, Associate Editor
If a market is lost, it takes time to get it back. California Ag Today recently spoke with Brian Kuehl, executive director of Farmers for Free Trade, about the topic. A concern is that competitors are entering the markets that we currently occupy.
“No farmers invest huge amounts of time and energy trying to open markets or trying to develop trade relationships, and they’re being torn up in a matter of months,” Kuehl said.
Tariffs will cause long-term problems. One major issue is that when tariffs are established, other countries will begin put to put tariffs on our food. Those countries then begin to plant more crops to adjust. Soon, those countries become their own producers instead of relying on the U.S. Those countries then look to other countries that are more dependable, which in turn becomes a competitor to the United States.
The renewal of NAFTA will help.
“If this is not resolved soon, we certainly are doing lasting damage to agriculture. It could trigger the next farm crisis,” Kuehl said.
It looks like the U.S. is moving toward a deal with Mexico on a renewal of NAFTA.
“Hopefully that would quickly lead to a deal with Canada,” Kuehl explained. “Mexico and Canada are our biggest trading partners.”
For many of our products, China is one our largest trading partners, and certainly one of the ones that is growing the fastest in terms of population.
“We do not want to squeeze ourselves out of the Chinese market for a decade to come; that that would be a colossal error,” Kuehl said.
The U.S. has routed products in the past. Some countries including Vietnam and Hong Kong route products into China.
“There might be a tariff on product going into China directly, but we know some of our growers are able to avoid the product that tariff by selling first to Vietnam and then Vietnam shifts into China,” Kuehl said. “That same tactic with Hong Kong is being shut down. China is getting much smarter at saying you can not circumvent our tariff, so we are going to hold you to these tariff rates.”