HURON – South Dakota producers and manufacturers have been patient with the Trump administration as it tries to finalize a trade deal with China “but their patience is running thin, there’s no question about this,” Rep. Dusty Johnson, R-S.D., said Thursday.
“They are frustrated,” he said during a conference call with reporters. “They have been more patient than I would have expected. This has been a long slog.”
The president’s threat to impose additional tariffs on Chinese imports was scheduled to take effect at midnight Wednesday.
“Tariffs for tariffs sake are a bad idea,” Johnson said. But when used as a hammer against China they could be good news because other countries agree the only thing the Chinese understand is hard ball, he said.
Once they cut a deal, they routinely fail to hold up their end, he said. But they have to be held accountable throughout the lifetime of any agreement, he said.
“What producers really want are fair trade deals,” said Sen. Mike Rounds, R-S.D., in a separate conference call on Thursday.
Soybeans are down 20 percent, or $2 a bushel. Net farm income has declined 50 percent in the Upper Midwest in the last five years.
“Producers can’t handle this for much longer,” he said.
Asked if he is confident a deal can be struck, Rounds said, “We won’t know if we’re actually going to have a deal until it happens. We do know we don’t have a deal today.”
But a Chinese trade delegation is in Washington, D.C., this week and he said that gives him some reason for optimism.
Negotiations seemed to be going well until late last week when China walked back some prior promises it had made, Johnson said.
“When people start walking things back, it can cause real damage with the house you’re trying to build,” he said. “When the Chinese start reneging on commitments, what are you going to do?”
The Chinese bought half as many soybeans this year as compared with last year. Producers don’t know where they’ll put the beans after this fall’s harvest if they can’t start moving the stored product soon, he said.
Rounds said China has an economic policy that includes taking U.S. intellectual properties and driving trade deals that aren’t fair.
“When America gets a fair shot, we win,” he said.
While a deal with the Chinese remains in limbo, Rounds said the U.S. also needs more trading markets. He is hoping the House takes up USMCA, the replacement for the North American Free Trade Agreement, that would be with Canada and Mexico.
Johnson said he has been working daily with his Democrat colleagues in the House in getting support for the deal. Twelve million jobs depend on trade with those two countries, he said.
Unlike the Senate, many of the 435 members in the House represent urban districts and don’t have strong connections with agricultural interests, he said.
But the key will rest with House Speaker Nancy Pelosi, he said, adding he spoke as recently as Wednesday with top legislative leaders about trade issues.
As for a lack of a deal with China, Rounds said manufacturers are having trouble getting parts and are worried about the possible loss of jobs.
“It’s aluminum and steel primarily,” he said. “They understand how serious this is and they are very worried about it.
“We are watching very carefully and we are very hopeful this trade deal moves forward in a timely fashion,” Rounds said. “We don’t know if it’s going to happen, but we’re hoping it does as quickly as possible.”
Meanwhile, Johnson wanted constituents to also know that despite the wall to wall cable news coverage of the showdown between Democrats and the White House over subpoenas and contempt of Congress issues, “there are real things getting done.”
Significant child abuse and neglect prevention legislation, for example, has been reauthorized, he said.
It provides for more resources and a better focus on the funding, while giving the states more flexibility, Johnson said.
“This is not going to lead the six o’clock news on CNN, I understand,” he said.