Farmers eye tariff as potential trouble

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New tariffs could have unintended consequences on Michigan exports like soybeans. Image: Wikimedia Commons

By Kaley Fech
Capital News Service

Many Michigan farmers are worried about a potential backlash as a result of higher federal tariffs and new international trade policies.

“The big concern in agriculture right now is that by leveling steel and aluminum import tariffs against some of our key trading partners, like China, it could levy a retaliatory tariff, and often retaliation targets agriculture,” said Chuck Lippstreu, a publicist for the Agricultural Leaders of Michigan.

That could to lead to unintended consequences and a retaliation against Michigan agriculture and U.S. agriculture that would hurt farmers, he said.

One of the biggest concerns is the effect a backlash from the tariffs could have on soybeans.

“Michigan produces over 100 million bushels of soybeans annually, or three million tons,” said David Williams, the president of the Michigan Soybean Promotion Association based in Frankenmuth. “Michigan exports over 60 percent of its soybeans.”

China is one of the country’s top customers for soybeans, Williams said. U.S. exports to China are worth around $14 billion a year.

China is also one of the major targets for the new steel and aluminum tariffs imposed by President Donald Trump.

“If these tariffs cut our market access, that could really hurt the U.S. economy,” Williams said.

The price farmers get for agricultural commodities is lower than in the past, and retaliatory tariffs on commodities would only increase their problems, he said.

Soybeans are a versatile crop, Williams said. The main product is soybean meal, which is used as feed for animals. The oil is also extracted and used in carpet backing, the foam in car seats, plastics and a multitude of other products.

Milk is another commodity that could feel a backlash because of retaliatory tariffs.

“Dairy has become part of the global economy,” said Ken Nobis, the president of the Michigan Milk Producers Association. “And agricultural products are usually the No. 1 target of trade disputes.”

The Novi-based group has plants in Constantine, Ovid, Mt. Pleasant and Middlebury, Indiana.

Michigan produces 11 billion pounds of milk each year, and while most of that milk is sold in the United States, Michigan dairy farmers could still be adversely affected by retaliatory tariffs.

“Exports for the country as a whole are about 15 percent of milk produced,” Nobis said. “Retaliatory tariffs would affect the prices of milk for all U.S. farmers because they would make the U.S. less competitive in the global market.”

Plenty of dairy is produced globally, Nobis said, so other countries can simply go elsewhere to get their milk.

“Tariffs can really knock things out of whack,” he said.

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