Not necessarily an either/or situation

April 14, 2018

The newly imposed tariffs and levies on imported steel and aluminum — and their impact on agricultural trade — has been a frequent topic of discussion ever since President Donald Trump first announced his plans to strike a blow for fair trade for the U.S. steel industry.

But as is the case with many political developments, the passage of time — and the revealing of details — often spurs a better understanding, and even a sense of appreciation, for what has been proposed.

That’s how we look at recent comments by Sonny Perdue, the U.S. secretary of agriculture, who said that while he still shares concern about agricultural exports, the new tariffs don’t look as harmful as he originally thought.

“We hope to turn it into a positive. This president has the unique ability to turn some things that we think are initially negative into positives,” he said.

How can that be? Partly because Canada and Mexico — two key trade partners — have been excluded from the tariffs. That could spark discussions on improving the North American Free Trade, which is also a U.S. priority. If that occurs and the result meets with U.S. approval, the president may come out of this looking like a genius.

Another factor is that the president said he was willing to work with Europe and other U.S. allies on improving trade.

“This is a president who is willing to change his mind over issues,” Mr. Perdue said. “He came out of the campaign believing that everybody in the U.S. hated NAFTA. We had to show him that many of his supporters benefited from NAFTA.”

It may mean that agricultural interests’ concerns about the negative impact from the steel and aluminum tariffs will prove to be overblown.

All the while, the U.S. steel industry — including entities like Nucor and Norfolk Iron & Metal — may be better able to provide its global competitiveness as long as the playing field is level. That’s long been a concern because of China’s history, for example, of subsidizing its exports.

Initial reactions to the tariffs also may have been overblown in regard to the price increases that could result from higher-priced imports. Specific examples offered of what that impact could be have not struck us as overly onerous.

Time will tell how this all shakes out. We don’t want to see agricultural trade negatively impacted. We want to see the steel industry have a chance to compete fairly with other steel-producing countries. We’re optimistic that the tariffs and levies imposed by the president don’t have to be an either/or situation.