The skirmish between Harley-Davidson and Donald Trump spotlighted the president’s spiraling trade war, but it’s small potatoes compared to the devastation that could befall California agriculture.
The iconic motorcycle company announced on Monday it is shifting some production outside the U.S. to avoid European Union tariffs – about $100 million a year – that were in retaliation for Trump’s tariffs on EU steel and aluminum. In response, Trump, of course, tweeted threats that Harley-Davidson would be taxed “like never before!” and it would be the “beginning of the end” for the company.
California farmers want to get around tariffs, too, but they can’t just pick up and move their production of almonds, wine grapes and other crops. Nor would they want to since the Golden State has some of the richest farmland in the world. California is the nation’s top agricultural exporter with more than $20 billion a year.
Almonds, worth between $6 billion and $7 billion a year, are California’s most lucrative crop, and 70 percent of them are exported. So growers are very concerned about the trade conflict, says Richard Waycott, president and CEO of the Almond Board of California, which represents 6,800 growers.
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Almond board leaders went to Washington, D.C., in May to stress the importance of free trade to California lawmakers and officials with the U.S. Department of Agriculture and the U.S. Trade Representative.
Already, the trade disputes are hurting lots of farmers and the businesses that depend on them, according to the California Farm Bureau Federation.
In June, the EU started imposing retaliatory tariffs on more than $3 billion in U.S. products, including the Harley-Davidson cycles and major California crops such as rice. In April, China began hitting back with its own tariffs on $3 billion of U.S. goods, including California farm products such as fruit, nuts and wine.
But it could get much worse starting July 6 if China – California’s top export market for pistachios and second for almonds – follows through on $50 billion in additional tariffs it announced in reaction to U.S. duties on Chinese goods. Trump, in turn, ordered the drafting of $200 billion more in U.S. tariffs.
For almond growers, a 10 percent tariff in China that rose to 25 percent in April could jump to 50 percent in July if there’s no agreement. China is a $500 million annual market for California almonds, but with all the uncertainty, contracts for future shipments are already down, Waycott told the Sacramento Bee’s editorial board. While global demand for almonds is strong, being cut off from China will hurt.
It’s not just the EU and China that California farmers have to worry about. Turkey recently announced $267 million in tariffs targeting crops. That nation is the second largest export market for California walnuts – about $190 million worth in 2016. And in coming weeks, California agriculture could face more tariffs from Canada, Mexico and other key trading partners.
As former U.S. Agriculture Secretary Tom Vilsack argues in an op-ed in The Sacramento Bee, it makes no sense to sacrifice the farm industry to feed Trump’s obsession with reducing the U.S. trade deficit. “If exports sneeze, California agriculture catches a cold, and the state economy takes a hit,” he writes.
Because some crops aren’t harvested and shipped overseas until the fall, there’s some time to negotiate a ceasefire before the tariffs fully take effect and stomp all over California farms. Then again, that’s also more time for Trump to ratchet up the trade war.
Agriculture isn’t the only industry at risk. Exports are a huge part of California’s overall economy, totaling $172 billion in 2017, 11 percent of the U.S. total. The state took a hit when Trump pulled out of the Trans-Pacific Partnership and reopened the North American Free Trade Agreement. If you’re worried about when the next recession will hit, a trade war would certainly make it sooner.
So now is the time for California Republicans – especially those representing farming communities in the Valley – to be far louder in urging the Trump administration to stop this trade war. It’s not only good for their districts, it’s smart politics. Democrats trying to unseat GOP Reps. Jeff Denham of Turlock, David Valadao of Hanford and Devin Nunes of Tulare have already strafed them on trade. While Denham and Valadao signed a May letter warning the administration about the impact on California agriculture, they need to more vocally and consistently make the case.
If Republicans won’t stand up to this president when the livelihoods of their constituents are clearly at stake, when will they?
Indeed, regardless of party, and despite all the uncivility nowadays, the health of California’s farms should be one issue where we can all speak with one voice.