Sen. Jon Tester cautioned Tuesday that tariffs imposed by the Trump administration could have negative effects on Montana agriculture, as well as other businesses in the state, possibly reversing generational efforts to access outside markets.
In a media call, Tester said Montana’s farmers and ranchers are being used in a trade war they didn’t ask for and didn’t see coming.
“Agriculture is our state’s top industry – it’s the economic driver for literally every community,” Tester said. “This trade war could ultimately eliminate access to international markets, result in lower commodity prices and put a pinch on ag families we haven’t felt since the 1980s.”
Two months ago, the Trump administration began placing tariffs on a number of products, including a 25-percent tariff on steel and 10-percent tariff on aluminum imported from the country’s top trading partners, including Canada, Europe and Mexico.
Hundreds of billions of dollars in tariffs were also slapped on a number of Chinese goods. Most countries, including China, Canada and Europe, have responded by placing retaliatory tariffs on U.S. exports.
That could have grave consequences on Montana businesses, including agriculture.
“Montana’s grain producers alone harvest nearly $2 billion worth of wheat and barley each and every year,” Tester said. “Over the weeks and coming months, I have no doubt these tariffs are going have a negative effect on the prices of our crops if we don’t find a solution and find it quick.”
While the Chinese market reopened to Montana ranchers last year after being closed for more than a decade, it could once again become inaccessible to state producers.
Tester said Montana was expecting to ship more than $200 billion in beef to China over the next three years. But a 25-percent retaliatory tariff placed on American beef by China could shatter that expectation.
“That’s going to have some negative impacts on our prices, putting a market of a billion people out of reach for Montana ranchers,” Tester said. “If prices continue their downward trend, family farms will be forced to make some difficult decisions.”
The impacts of the Trump tariffs are already being felt across the state, Montana growers, producers and builders have said over the past month.
Farmers in eastern Montana have forgone projects and plans due to increasing prices. Even the Missoula Public Library ran into a budgeting challenge last month, given a sharp increase in steel and aluminum prices.
Partnerships with foreign buyers built over years on trust and goodwill are beginning to vanish.
“Farmers and ranchers have worked for generations to build successful export markets in Asia, Europe and North America,” Tester said. “These markets did not pop up over night. They came to fruition through hard work, good faith, developed trust and negotiations, but they’re fragile and we’re seeing the fragility of those markets as we speak.”
With uncertainty now certain, U.S. rivals including Russia and Argentina are moving in, looking to snatch up buyers who are disgruntled with recent U.S. trading policies.
Mexico, which imports more barley from Montana than any other country in the world, just signed a long-tern grain agreement with Argentina, Tester said. That, he added, could be a sign of things to come.
“If we continue down this path, the trade war will cause farmers to go broke, and that’s unacceptable,” Tester said. “With the added pressure of tariffs, producers can’t afford to lose more certainty as they plan for next growing season.”
Tester said he’s working with members of both parties to give Congress a role in imposing tariffs, though it won’t likely go far enough.
While the U.S. must hold China accountable for its past practices, Tester said, there are other ways to do it without sacrificing local farmers, ranchers and small businesses.
“The negative impacts on these tariffs are causing further emphasis for a strong farm bill,” Tester said. “It’s the best legislative tool we have to invest in the economy of rural America.”