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Chairman Reichert Opening Statement at Hearing on The Effects of Tariffs on U.S. Agriculture and Rural Communities

July 18, 2018

WASHINGTON, D.C. –  House Ways and Means Trade Subcommittee Chairman Dave Reichert (R-WA) delivered the following opening statement at a Subcommittee Hearing on The Effects of Tariffs on U.S. Agriculture and Rural Communities.

CLICK HERE to watch the hearing.

Remarks as prepared for delivery:

“Good afternoon.  The Subcommittee will come to order.  Welcome to the Ways and Means Trade Subcommittee hearing on the effects of tariffs on U.S. agriculture and rural communities.  Before hearing from our witnesses, I’d like to make a few points. 

“As many of you know, U.S. farmers, ranchers, and growers right now are caught in the middle of international crossfire.  First, they are hurt because products, such as equipment, chemicals, and fertilizer, which they need to run lean and competitive agriculture operations, have been included on the Administration’s Section 301 list, as well as the steel and aluminum they need.  And then, adding insult to injury, they are the first to face retaliatory tariffs from across the globe as countries react to U.S. trade policy decisions.  In fact, U.S. agriculture is now facing retaliatory tariffs from the EU, China, Mexico, Canada, Turkey, Russia, and India. 

“Now, I know that the Administration did not intend for U.S. agriculture to be hurt, but the damage is entirely predictable.  As some of you know well, low commodity prices have made the last several years very challenging for many American farmers.  And what we’re hearing from farmers, ranchers, producers, and fisherman in my home state of Washington, and many other states across the country, is that U.S. agriculture just isn’t in a healthy place.

“Most of our agriculture producers today rely heavily on export markets, and unfortunately, many of these farmers and producers are now facing the loss of not just one of their top international export markets, but their top 2, 3, and 4 export markets – all at once.  They are facing severe and devastating uncertainty – and that goes right to their profitability.

“Now, it’s important to acknowledge that the President is absolutely correct that we need to stand up to China’s unfair and predatory trade practices, including overcapacity in steel and aluminum, IP theft and other Chinese policies that endanger the innovative technologies developed by U.S. companies.  As we take on China, though, we must take into account the effects on U.S. agriculture, like the examples we’ll hear today.

“I’ve heard heart-wrenching stories, in some cases of farmers and families already scrambling to make ends meet, who are forced to make difficult decisions to cope with the uncertainty caused by tariffs.  They don’t know what and how much they should plant.  They are having trouble getting financing, and they are forced to put expansion plans on hold.  Entire rural communities are affected when farmers are struggling – their suppliers and workers, and even banks, restaurants, and school districts.

“As we learn about the challenges that many people in the agriculture sector are facing, it’s critical to remember that many family farmers have invested all they have in their farms, their orchards, or their ranches – and sometimes these have been in their families for generations.  

“This is serious business – it is their livelihood.  And even worse, our small farmers and producers are suffering the most, because they already are running on tight margins, without the economies of scale that the larger producers can benefit from.

“In my home state of Washington, one winery has already lost $500,000 in export sales after China imposed a tariff in retaliation for the Section 232 tariffs – their shipments dropped by 50 percent in the second quarter alone.  In another sector, USDA reported that China canceled nearly $140 million in soybean contracts at the end of June. And as you will hear in a few minutes from our witness from Washington State, cherry producers are really feeling the pinch during their short cherry season, as they face an additional 25 percent tariff in China, their top export market.

“Today we’ll hear from a broad range of American agriculture producers about the real-world impact of increased tariffs.  I’m eager to hear from our witnesses and learn how these tariffs are affecting their farms, families, and communities.  Our hearing will focus on both U.S. tariff increases related to the Section 232 action on steel and aluminum and the Section 301 tariffs on China as well as retaliatory tariffs from around the world.

“I look forward to learning from our excellent panel of witnesses today as we all continue to engage with the President regarding how to reach a durable solution to the challenging trade agenda.  I, for one, have urged the President to restore the exemptions from steel and aluminum tariffs for Mexico and Canada – two of America’s most trusted allies that are also incredibly important markets for our agricultural exports.  

“At the same time, I am encouraging the President to push forward with our negotiations with our other international trading partners, including with China, to find a solution that evens the playing field for American workers, manufacturers, service providers, and farmers, while at the same time making sure that farmers don’t become collateral damage. 

“We also cannot lose sight of the cost of inaction when it comes to new markets. When our trading partners move forward and make agreements without us, our farmers, workers, and business fall behind.”