China trade tensions worry US farmers
California Republican members of Congress are delivering a warning to Agriculture Secretary Sonny Perdue in a letter set to go out Tuesday evening: Tariffs are “threatening the economic livelihood of our businesses and communities” — and the department needs to do more to help.
Rep. Jeff Denham of Turlock circulated the letter, which was joined by fellow Republicans David Valadao, Devin Nunes, Ed Royce and Ken Calvert, as well as California Democrats Ami Bera, Jim Costa, Jimmy Panetta, Julia Brownley and Salud Carbajal.
A copy of the letter, obtained by The Sacramento Bee, indicates many Republicans — and their constituents in the agriculture industry — were not placated by the Trump administration’s effort last week to reassure lawmakers that their trade strategy is working.
The White House announced on July 24 that it was preparing a hefty $12 billion aid package for farmers hurt by foreign tariffs, which have been ratcheted up in recent months in response to new American duties. China, in particular, has slapped heavy taxes on some of California’s top agricultural exports, including almonds, walnuts and a range of fresh produce.
The next day, President Trump announced that he and European Commission President Jean-Claude Juncker had agreed to “work together toward zero tariffs” between the United States and the European Union. And on July 26, top Trump economic advisors Peter Navarro and Larry Kudlow held a closed door meeting with House Republicans in an attempt to address their trade concerns.
California Republicans said they were heartened by those steps. Kudlow and Navarro “both assured us that the administration’s ultimate trade objective is zero tariffs, zero non-tariff barriers and zero subsidies,” Rep. Tom McClintock of Elk Grove said in a statement. “I wholeheartedly endorse these objectives and am encouraged by the announcement (Thursday) regarding the E.U.”
The path forward, however, remains unclear, not just in regard to Europe but also China, Canada, Mexico, India and Turkey, who have increased taxes on American agricultural products and other goods — some north of 50 percent.
In Senate testimony on July 26, U.S. Trade Representative Robert Lighthizer expressed optimism that the administration was “close” to finishing negotiations to update NAFTA, the landmark free trade agreement with Mexico and Canada. China, however, is going to be a longer term problem,” Lighthizer said, although he added, “That isn’t to say we’re going to be in a trade war with China.”
Trade war or no, the spat between Washington and Beijing that began in March has begun to bite. House Republicans wrote in their letter that the tariffs “are making fruits, vegetables and tree nuts in our districts significantly more expensive than their competitors.” In its current form, Trump’s aid package doesn’t do enough to offset that, they argued.
Under the plan’s outlines, specialty crop farmers would not qualify for direct payments from the federal government, the way crops like soybeans, corn, wheat and sorghum would. The congressmen that signed the letter, which was drafted and circulated by Denham’s office, say that’s unfair. “We share (growers’) concerns about solely relying on a food purchase and distribution program for these extremely diverse and high-value commodities, such as tree nuts, citrus, leafy greens, berries, stone fruit, and potatoes.”
“Any program that is focused on direct payments,” they continued, “should be constructed in a way that can also work for the growers of these types of commodities.”
California Republicans have been cautious about confronting the Trump administration publicly on trade, speaking out only sporadically. McClintock warned in a speech on the House floor at the beginning of March that raising tariffs would hurt the economy. Valadao, Denham, Republican Steve Knight of Palmdale and five Democratic colleagues from California sent a letter to Lighthizer in early May expressing “strong concerns” about the trade conflict with China and its impact on agricultural exports. And a number of California Republicans joined a bipartisan July letter warning against auto tariffs.
Nunes, who represents a large farming community in Fresno and Tulare Counties, tried a different tack: flattery. He signed onto a letter from Republican members of the House Ways and Means Committee to the president last week, heaping praise on Trump’s negotiating skills. “We are confident that if you personally engage with President Xi, you would reinvigorate the negotiations and develop meaningful solutions that will establish free, fair, and lasting trade between the United States and China,” it read.
None of California’s Republican members, however, have thrown their support behind legislation to limit the president’s power to impose tariffs, a move that is gaining support from influential Senate Republicans.
Their reticence may in part be due to the influence of House Majority Leader Kevin McCarthy of Bakersfield. McCarthy was noticeably absent from the Perdue letter — one of only two San Joaquin Valley congressmen who did not sign on — despite representing Kern County, the state’s largest agricultural producer and one of the top vegetable producing regions in the America.
According to one industry lobbyist, his office is urging others not to rock the boat on trade, telling the state’s farming interests it’s best to stay quiet and ride out the consequences. McCarthy’s office did not respond to requests for comment on the trade discussions with the administration or the agriculture sector back home.
McCarthy’s message, however, echoes the one President Trump and his top administration officials are delivering. “When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity,” the president tweeted last week. “Negotiations are going really well, be cool.”
For California Republicans, that’s easier said than done. With harvest season for many crops getting underway and produce starting to pile up in storage facilities, the political heat is rising back home. And an organization affiliated with American Farm Bureau Federation is seeking to intensify the pressure while lawmakers are in their districts during the the month-long congressional recess that starts this week.
The group, Farmers for Free Trade, launched a multimillion dollar ad campaign on July 26 to “highlight the widespread economic pain” that the president’s “trade war” is causing. As part of that effort, the group plans to hold town halls in Fresno and Bakersfield on Aug. 15 and 16, respectively.
California farm groups, meanwhile, expect to spend August lobbying furiously for a bigger slice of the USDA aid program. In the letter, the bipartisan group of California lawmakers exhorted Perdue to listen. “We urge you to continue working with the specialty crop stakeholders on their recommendations,” they wrote.