AP NEWS

US-China trade war a big worry for North Dakota farmers

July 22, 2018

BISMARCK, N.D. (AP) — North Dakota is well down on the list of top soybean-producing states, but for farmers who grow the crop, the escalating U.S.-China trade war is every bit as important as it is to their colleagues in top soybean states like Iowa and Illinois. And it might even be a factor in the U.S. Senate race in the state. A look at what’s at stake

WHAT’S THIS TRADE WAR ALL ABOUT?

The Trump administration early this month imposed a 25 percent tax on $34 billion worth of Chinese products in response to complaints Beijing steals or pressures companies to hand over technology. China retaliated with taxes on an equal amount of U.S. products including soybeans. The Trump administration then announced 10 percent tariffs on $200 billion worth of Chinese goods, which won’t take effect until at least September, prompting a World Trade Organization challenge by China.

HOW BIG OF A DEAL ARE SOYBEANS IN NORTH DAKOTA?

North Dakota isn’t a large grower of soybeans, ranking ninth among soybean-growing states and producing less than 6 percent of the nation’s crop. But soybeans have grown in popularity in North Dakota in recent years thanks to strong prices, and this year the 6.6 million acres planted by farmers equals the size of the state’s staple spring wheat crop.

Nearly three-fourths of the soybeans grown in North Dakota are sent by rail to the Pacific Northwest and from there shipped to countries in southeast Asia, according to the North Dakota Soybean Council.

“China is the No. 1 international destination for North Dakota soybeans,” said Simon Wilson, executive director of the nonprofit North Dakota Trade Office. He estimated the annual worth of North Dakota beans sold to China at about $1.4 billion.

“For us, this is a big deal, when you have the largest market effectively putting (tariffs) into place,” Wilson said.

SO HOW BIG OF A DEAL IS IT?

“We’re in the crosshairs right now,” said Joe Ericson, 37, a Trump supporter who with family farms about 5,000 acres of soybeans and other crops near Wimbledon.

Ericson, president of the North Dakota Soybean Growers Association, traveled to Washington, D.C., this month for American Soybean Association meetings and met with lawmakers about farm issues including tariffs.

“That’s the top priority,” he said, adding that farmers are hopeful Congress will give them some sort of safety net to ride out tariff-related market disruptions.

Ericson said he forward-contracted much of his crop this year, meaning his price is set and won’t be impacted by market drops. But those who sell right off the combine will be hurt, he said. Farmers typically don’t store a lot of soybeans to sell later when prices rise, to save space for other crops such as corn that produce more bushels. Many soybean farmers also grow corn, and if they flood the market with corn, it could hurt the prices they get for that crop, creating a double-whammy.

“It’s a tough environment right now,” Ericson said. “We’ve just got to get through it. Hopefully the president knows what he’s doing.”

IS THAT THE ONLY HOPE?

Not necessarily, according to Republican North Dakota Agriculture Commissioner Doug Goehring, who farms soybeans near Menoken.

Goehring also has a background in international marketing through previous work with the United Soybean Board and the U.S. Export Soybean Council, and said he thinks the country will be better off down the line because of what Trump is doing.

“U.S. farmers and ranchers have been exposed to the highest tariffs in the world by other countries. It’s unfair and it’s wrong,” Goehring said. “This needs to get addressed. In the long run we’ll be much better off.”

The U.S. also needs to tap into other markets, he said.

“The rest of the world has to come to us for beans,” Goehring said. “If China is buying up (beans from) Brazil, everybody has to come to us.”

Goehring acknowledged that “there’s a lot of anxiety in the ag community” about the tariffs and that “as a soybean farmer myself, I get that.” But he added, “we don’t need to be drama queens about this.”

IS IT ALL ABOUT SOYBEANS?

No. The U.S. also has imposed tariffs on imported steel and aluminum, and that could indirectly hurt farmers by driving up the cost of farm equipment, according to Wilson.

“Trade wars — nobody wins,” he said.

Wilson also thinks the tariff issue “could go past the harvest and into the election,” and that the positions of North Dakota’s two U.S. Senate candidates on the tariffs might sway some farmers’ votes.

“If farmers don’t feel they are being heard, those are things that come into question,” he said.

Democratic U.S. Sen. Heidi Heitkamp is facing a challenge by Republican U.S. Rep. Kevin Cramer in a race seen as critical for control of the Senate. Heitkamp seems more inclined than Cramer to criticize the Trump administration on the issue.

Heitkamp has called the escalating trade war “damaging” and “misguided” and said the Trump administration “isn’t listening to the needs of rural America.”

Cramer has said that while he doesn’t view tariffs as “a good long-term tool,” he believes trade disparities have harmed American farmers for decades and that “there are a lot of people pulling for the goals of the president” as the administration works to secure better trade deals.

Goehring said the trade war is likely to be “a different scenario and situation” by fall, and Ericson also questions if it will be an issue come November.

“I don’t know if this tariff thing is really Congress’s deal,” he said, adding that the Senate race in North Dakota “is going to be close no matter what.”

Mark Jendrysik, chairman of the University of North Dakota’s political science department, said he’s uncertain “how this will all shake out.”

“Are farmers already feeling negative effects from the tariffs? That might give Heidi an opening,” he said. “But North Dakota farmers have been solid for the Republicans, like the rest of the state, for quite a while.”

___

Follow Blake Nicholson on Twitter at: http://twitter.com/NicholsonBlake