In a scathing editorial published after Donald Trump addressed farmers in Nashville on Monday afternoon, the editorial board of the Wall Street Journal hammered the president’s proposed trade policies that will damage those same farmers by shutting down markets for them.
In his Monday speech, the president touted the GOP’s recently signed tax plan that he told the assembled crowd will, “keep your farms in the family” because of changes to the estate tax.
According to the Journal, those farms may be worth a lot less if Trump gets his wish and pulls out of Nafta as he promised, thereby “making America weaker.”
“Farmers are scared stiff that Mr. Trump might take a protectionist turn that would impose more government barriers,” the editorial explains. “Highly efficient and productive, U.S. farmers thrive in a competitive global market. But tariffs are border taxes that raise costs for U.S. producers and consumers. Managed trade via quotas also shelters producers from competition and raises costs for consumers.”
The editorial goes on to delineate the damage Trump has already inflicted on farmers and ranchers in the rural communities that supported him in the 2016 presidential election.
“Mr. Trump already walloped U.S. farm exporters when he dropped out of the Trans-Pacific Partnership, which has given Europe, Australia and Canada an edge to meet growing Asian demand for high-value farm products. After Japan imposed 50% ‘safeguard’ tariffs on frozen beef last July, U.S. imports dropped by a quarter. Imports from Australia, which has a trade deal with Japan and supplies about half of its frozen beef, increased by 30%.” the Journal reports.
“The greatest danger to the Farm Belt is that Mr. Trump might withdraw from the North American Free Trade Agreement. The U.S. sends about $18 billion a year in farm products to Mexico and $23 billion to Canada, which together account for a third of American farm exports. Since Nafta came into force in 1994, farm exports to Mexico and Canada have more than quadrupled. Soybean exports to Mexico have quintupled,” the editorial continues.
“If the U.S. nixes Nafta, the three economies would return to most-favored-nation trading status and tariffs would revert to World Trade Organization levels. This would harm the U.S. the most since Canada and Mexico have higher tariffs under WTO rules than the U.S. does. Mexico imposes a 10% tariff on pork, 25% on beef and 75% on potatoes. Those rates are zero under Nafta.”
“One argument Mr. Trump should hear is that a U.S. withdrawal from Nafta would most hurt states like Iowa and Wisconsin that gave him his election victory.” the editorial continues before concluding, “Trashing Nafta would be among the great self-inflicted wounds in history. It would also tell other countries that the U.S. can’t be trusted to keep its word on trade, which would make it impossible to cut the bilateral trade deals the President says he wants. This is a strategy for making America weaker.”
You can read the whole thing here.