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Our view: Trade war: It's worth more than hill of beans

Herald editorial board Donald Trump did well in rural America in 2016. If he hopes to maintain that kind of support, it would be wise for the president to reconsider raising tariffs on imported steel and aluminum. The president says it's a trade ...

Herald editorial board

Donald Trump did well in rural America in 2016. If he hopes to maintain that kind of support, it would be wise for the president to reconsider raising tariffs on imported steel and aluminum.

The president says it's a trade war, and trade wars "are easy to win." Well, it's not necessarily that simple for the people who make up America's midsection, where agriculture reigns.

In an op-ed he wrote for the Des Moines Register, U.S. Rep. David Young, a Republican, concisely spelled out the potential danger. He said President Trump has helped steer the economy and has showed leadership in Congress by delivering tax relief to workers and job creators. However, he said, economic gains can quickly fade if the president reverses America's trade policies.

"Tariffs could blunt the positive outcomes of the new tax code," Young wrote in his op-ed to the Register. "Higher prices on canned goods, farm machinery, appliances, vehicles and other products are only part of the problem with tariffs. Countries are threatening to impose tariffs on important U.S. products, and the easiest target is our agricultural exports."

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The problem, at least according to Young and many others - including us - is that the farm economy isn't terribly healthy at the moment. Retaliation resulting from these new tariffs could mean American products won't easily be sold to traditional trade partners, such as China.

Here in the Dakotas and Minnesota, that could mean a big hit in commodity sales and prices.

For example, the American Soybean Association recently expressed concerns that China will retaliate against the tariffs by buying fewer American soybeans. China is the top buyer of U.S. soybeans, importing 1.4 billion bushels annually from the United States.

What could that mean around these parts? Do the math: Minnesota is the nation's No. 3 soybean producer, with 399 million bushels produced last year. North Dakota is No. 8 (235 million bushels) and South Dakota No. 9 (219 million bushels).

In 2017, James McGregor, chairman of APCO Worldwide China, discussed China-U.S. relations at the first Eye of the Hawk lecture at UND. He reminded attendees that North Dakota's connection to China is great, since the state exports approximately $800 million in crops to China each year.

Overall, the U.S. exported $21 billion in ag products to China in 2016, according to the Department of Agriculture. Of those products, $14 billion came via soybean trade.

And then there's this: The president's tariff on steel could similarly affect the ag industry since tractors, combines and all sorts of farm implements are created from steel. Some estimates show steel costs rising 30 percent, and such an increase would be felt first by implement dealers and then by the aggies who need those products.

A trade war right now wouldn't be good for the agriculture industry. To allow a trade war to ignite is reckless since farmers need more, not fewer, options to sell their crops and pay for their machinery.

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