Plans President Donald Trump has made to place new tariffs on foreign-made steel and aluminum Thursday have rattled Montana’s agriculture sector. MTPR's Edward O’Brien has reaction from farmers and ranchers who fear they’ll be the first casualties of a new trade war.
Beef and cattle prices were stronger than anticipated last year, due in large part to the strength of international demand. China’s largest online retailer inked a 3 year deal in 2017 to buy $200 million worth of Montana beef. Japan is another critically important customer to Montana cattle producers.
"So anything that maybe could disrupt that momentum, we’re certainly concerned about," says Errol Rice, the executive vice-president of the Montana Stockgrowers Association.
Rice is talking about President Trump’s intention to place a 25 percent tariff on foreign-made steel, and a 10 percent tariff on aluminum imports. The announcement comes just months after China lifted a 14 year ban on U.S. beef imports following a mad cow disease scare in Washington state.
"Agriculture and food processing supply chains are now integrated across borders," Rice says. "Any sort of a trade war with China or any other country could greatly disrupt our ability to export beef — and harm U.S. consumers."
Broadview-area farmer, Michelle Erickson-Jones agrees. Jones, president of the Montana Grain Growers Association, says Montana exports 80 percent of its wheat. Most of it is sold to customers in the Pacific Rim. She views this week’s tariff announcement as the likely opening salvo of a brand-new trade war.
"For example, after we put up a tariff on solar and washing machines – particularly out of China – China added a fairly steep tariff to their grain sorghum imports," Erikson-Jones says. "China certainly is not afraid to use retaliatory tariffs as the sorghum growers have found out."
U.S. Agriculture Secretary Sonny Perdue says the administration must be prepared to help farmers and ranchers should there be, "market disruptions." So far, he has not offered any specific solutions.