Time for a Deal with China, Say Farm-State Senators

Half a dozen farm-state senators urged Trump trade officials on Thursday to speedily resolve the Sino-U.S. trade war that is compounding hard times on the farm. Senate Agriculture Committee Chairman Pat Roberts brushed aside assurances of a rosy future when trade deals are completed. "Some farmers aren't going to make it," he said.

"It is time for both countries to remain at the table and reach the best deal possible," said Roberts in opening a committee hearing on "Certainty in the Global Markets for the U.S. Agriculture Sector." Ag exports, a key source of farm revenue, are forecast to drop by 4% this year. Net farm income, a gauge of profits, is in a four-year slump, while persistently wet weather has disrupted spring planting and is lowering the outlook this year's crops.

"To be sure, there are choppy waters right now in the gap," said Ted McKinney, agriculture undersecretary for trade, who expressed confidence that President Trump's policy of confrontation and tariffs would pay off in more favorable trade relations. Farmers and ranchers are sticking with the administration, he said, and a second year of trade mitigation payments would help producers in the near term.

South Dakotan John Thune, a member of the Senate Republican leadership, relayed a question from farmers in his home state: What's the time line on China? "The answer is, I don't know," replied Chief U.S. Agricultural Negotiator Gregg Doud. The next obvious opportunity for progress, he said, is an expected meeting between President Trump and Chinese President Xi Jinping at the G20 summit June 28-29 in Japan.

When Thune asked about negotiations with Japan, Doud replied, "Ongoing as we speak." Japan is the No. 3 market for U.S. farm exports, behind Canada and Mexico. China used to be No. 1 but now ranks fifth, due to retaliatory tariffs.

"I am concerned there will be long-lasting harm" to U.S. farm exports from Trump's "reckless approach to trade," said Michigan Senator Debbie Stabenow, the senior Democrat on the committee. "The administration's strategy toward trade is to throw everything against the wall and hope something sticks." Minnesota Democrat Tina Smith asked about the president's promise of large food and ag purchases by Mexico. "We're waiting to hear the specifics on that," McKinney responded.

Minnesota Senator Amy Klobuchar, running for the Democratic nomination for president, asked where the administration drew the line on using tariffs on nontrade issues, an apparent reference to Trump's recent threat of tariffs unless Mexico stopped migrants from crossing the southern border. "No one has created more leverage out of thin air than this president has," replied Doud.

The top congressional priority of the administration is passage of the United States-Mexico-Canada Agreement, the successor to NAFTA, said McKinney, who said China and Japan were top of the list for negotiations.

Indiana Senator Mike Braun, a Republican, applauded Trump for demanding that China amend its trade practices. "Yes, it is going to cause some short-term pain. I think that's what we're going through."

"Our farmers need a win," said Senator Joni Ernst (R-IA), speaking a few minutes after Braun. Ernst pointed to the possibility of huge pork sales to China if tit-for-tat tariffs were removed. China's national hog herd has shrunk by at least 10% this year amid an epidemic of African swine fever.

To watch a video of the hearing or to read statements by McKinney and Doud, click here.