Washington agriculture and the Chinese trade war

Apple harvesting
Washington state farmers are citing concern that new Chinese tariffs on agricultural products will lower their prices and make it more difficult to make a profit. Photo: Pxhere

Washington agricultural businesses and producers need to find a new trade partner, and quick. That is what industry stakeholders are saying in response to China placing tariffs on 128 U.S. products including frozen beef, tobacco products, cars, whiskey, soybeans, flour and corn.

Starting Apr. 2, China implemented a 15 percent tariff on 120 of those U.S. products, and 25 percent levies on scrapped aluminum and several categories of pork products.

China’s retaliation is in response to President Donald Trump placing 25 and 10 percent tariffs on steel and aluminum, respectively, which began last month. Tensions are high as Trump announced this week he would place additional tariffs on $50 billion of Chinese goods. China followed suit. Now, Trump is considering upping the ante to $100 billion.

In response to the new levies, U.S. Department of Agriculture (USDA) Secretary Sonny Perdue released a statement saying: “The administration stands ready to defend agricultural producers who may be harmed. As we take a stronger approach to the way we handle trade as a nation, we will use all of our authorities to ensure that we protect and preserve our agricultural interests.”

However, the new focus will cause U.S. farmers to depend more on federal farm subsidies and cause them to “lose recently-developed Chinese markets to other competitors,” writes Washington Policy Center (WPC)’s Agriculture Policy Research Director Madilynne Clark.

She warns that Washington state will likely be one of the worst affected by the news, as it is the third largest exporter of food and agricultural products in the country. Last year, Washington shipped $18.2 million of fruit to China, which made up 23.7 percent of Washington’s exports.

April Clayton is an organic apple farmer and runs Orondo-based Red Apple Orchards with her husband. She told Lens that, “Eastern Washington state will be one of the hardest hit by this tariff if we don’t find a trading partner. A lot of fruit does get exported through China, especially Fuji apples during the Chinese New Year.”

She added that the agricultural industry tends to be hit the hardest by tariffs and trade wars. Also, China begin importing fruit from countries such as New Zealand or Australia.

“It’s a little bit devastating right now with farmers seeing a loss in net income,” said Clayton. “We can start to diversify, look for other income revenues. There is not a whole lot we can do besides get involved and get the message out there that we need trade in other countries for agriculture, so we can stay self-sufficient and food-secure as a nation.”

Margins for agricultural products are on the decline. Last year, organic Braeburn apples only sold for $24 for 900 pounds of fruit. Gala and Honeycrisp apples sold for more, said Clayton, but the state needs to find buyers for the state’s produce and agricultural products.

“We need to find a home for our fruit and our produce,” she added. “If we don’t, it’s going to affect the bottom line of farmers. If they go out of business, we will become food insecure and that is not a place we want to be in our country.”

Brad Haberman is the Second Vice President of Public Policy at the Washington Farm Bureau (WFB). He and his brother run a hay processing plant which exports alfalfa to China.

Although their product has yet to be hit by a new tariff, he fears that could change.

“If we don’t have the Chinese market it’s going to dump a lot of alfalfa into Japan, Korea and Taiwan, which is going to make the price go down on the hay because we are oversupplied,” he said.

Lowered alfalfa prices pull down the price of other hay too, he added.

“Any time you lose an export market it affects your pricing and your supply going to other areas,” he added. “You start to get an overabundant supply which normally causes the price to come down which we don’t want to see happen to any commodity or any farmer.”

“I’m hoping we can get to some sort of conclusion in a reasonable period of time and get everything flowing again for the other farmers too,” he added.

 

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