As the news, PR, and political posturing machines work overtime to crank out more and more extreme and inflammatory statements about the current trade war, it is important to keep a cool head and some perspective. I postulate that about 60% of what is being disseminated on various media is not designed to inform, but rather to manipulate opinion or create opposition. Thus, here are a few things to keep in mind as the rhetoric gets more shrill and the emotions more intense.
1. This is not an agricultural issue. Yes, I know agriculture is being severely impacted and that trade is a big part of the farm economy, but this trade war was not started over agriculture. Hundreds of other industries are involved, along with agriculture. An end to the dispute will only come when progress is made on all of the issues. If an agreement is reached on ag products but not on cars, computers, and steel, the President is not likely to sign off on the deal. Likewise, if a deal is reached on toasters and trinkets but not on soybeans, the deal will not fly at the White House.
2. The President knows what he is doing. There have been lots of accusations that Mr. Trump is out of control and out of touch. On the contrary, I think he knows exactly what he is doing. That is certainly not to say that I like what he is doing or agree with how he is doing it, but this is part of his overall plan. We should not be surprised by this, during the campaign he told us just what he was going to do and how he was going to do it.
3. The other guys are cheating. Often lost in all the debate is the verifiable fact that China, Canada, Mexico, and the EU have been breaking international trading rules and have not been living up to agreements they made with the U.S. We have been yelling and complaining about this for years, but they keep doing it. So Mr. Trump is taking a more direct approach, he punched them in the nose. China responded with a sucker punch to the midsection, our soybean market. Our only hope is that sooner or later (hopefully sooner) both sides will get tired of throwing punches and sit down and talk.
4. Aid vs. trade. The $12 billion aid package announced last week produced as much outrage within the farm community as it did outside of agriculture. While the details are yet to be released, one thing to keep in mind is that this is only a temporary program. Secretary Perdue has made it clear it is just for 2018. The hope is the trade war will be over by 2019. While most producers are not happy about the aid, the fact that there is something and there is an acknowledgement of the financial losses being incurred by farmers is a welcome departure from the past.
This is not a time to be happy, but rather to be hopeful. If the President is successful in making significant improvements in our trading relationships, both inside and outside of agriculture, it will set the state for sustained growth in U.S. exports. If this is accomplished in a relatively short period of time, Mr. Trump’s aggressive negotiating style will be praised. If, however, this drags on for years, the President may find it harder to hang on to the strong rural support that helped put him in the Oval Office. In the meantime, let us remain vigilant, informed, and levelheaded.
By Gary Truitt