Trade policy: USMEF explore possible impacts of Trump administration on ag exports
Fort Collins, Colo. – As the beginning of a new presidential administration approaches, those in the agricultural industry around the U.S. wait to see how the Trump administration will impact agricultural exports with their trade policies.
During the International Livestock Forum on Jan. 6-7, U.S. Meat Export Federation Trade Access Senior Vice President Thad Lively gave a summary of what producers can most likely expect under President-elect Donald Trump’s trade policy.
“Trump’s priorities for his economic policy are not going to seem that radical – grow the economy, create jobs, reduce the trade deficit and strengthen the U.S. manufacturing base. It’s hard to argue with that,” commented Lively.
However, Trump’s plans to achieve priorities are more controversial, said Lively, noting that he does not hesitate to use the term, “America, first.”
“He’s going to pursue ‘buy American’ and ‘hire American’ programs. That’s what his industrial policy will be all about,” he explained.
The Trump administration will be aggressive in their use of trade remedy cases.
“There are certain things they can do through the World Trade Organization that allow them to really go after other countries. There are limits to how far they can go within the law, but there are not immediate repercussions for going beyond those limits,” said Lively. “He has brought people with his team who all have a record of being as aggressive in that area as possible.”
Rather than multilateral negotiations, like the Transpacific Partnership (TPP), the Trump administration has talked about using bilateral negotiations between the U.S. and another country.
“He believes that most countries in the world want to export to the U.S. more than we want to export to them,” said Lively. “We’re not an export-driven economy.”
“His view is that when we sit down one-on-one with those countries, we’re in a much stronger position than if we’re just one of 12 or even more, every single one of whom has a vote equal to the United States, the biggest economy in the world. I think there’s some legitimacy to this,” he commented.
Trump has also talked about a trade deficit, meaning that we import more than we export. But, he has said that it will not be resolved by exporting more but rather by changing tax policy, implementing aggressive trade remedies and importing less.
“This is completely new. Again, if we compared this to a policy statement of any recent administration, we would have found the cornerstone of our trade policy was trade globalization,” explained Lively.
“If I had to summarize how I think a Trump administration is going to affect our exports of beef and pork in particular, I’d say the picture is still a little blurry,” said Lively, noting that one possible scenario would be improved access in China and the European Union, while another would be detrimental.
“I can also see a scenario where Trump succeeds with his so-called defensive objectives, but we get caught in the crossfire in Mexico and China and maybe see retaliated against the U.S. because we export so much product to those countries,” warned Lively.
Lively explained that both North American Free Trade Agreement (NAFTA) and the U.S.-Korea Free Trade Agreement have zero tariffs, meaning that no tariffs are paid on beef and pork going into Mexico.
“There’s a potential for us to get lost in the shuffle there because the truth is, that renegotiation is not about agriculture market access,” said Lively. “There’s also the possibility to make some improvements specifically in sanitary issues.”
As China is a major importer of U.S. pork, engaging in a trade war could result in the country retaliating against the pork industry. However, similar to NAFTA, there is the possibility for positive changes.
“If Trump’s strategy works, we might find that our access to pork into China gets better because we’ve got a lot of little issues that we work with the Chinese on every day,” said Lively.
To ensure that the interests and priorities of the agricultural industry remain in the forefront during trade negotiations, Lively stressed that the industry needs to bridge the gap in communication.
“The first thing we’ve got a do is say ‘Look, we support your objectives. We like what we see here,’ but we also need to be sure that President-elect Trump and his people understand how critical exports are to the long-term health of our industry,” said Lively.
“Beyond that, we should look for opportunities to build on this very aggressive approach that he plans to take, specifically in countries like Japan and China,” Lively continued.
It is especially important for the agricultural industry to guard their interests, particularly in China and Mexico, which both have significant agricultural interests, he added.
“We need to guard our interests, so we don’t become collateral damage as Trump pursues his policy,” concluded Lively.
Emilee Gibb is editor of Wyoming Livestock Roundup and can be reached at email@example.com.