1:34 pm
April 15, 2019
In a story Thursday, Shawn Donnan and Shruti Singh of Bloomberg Businessweek write about how the trade war is affecting farmers. One of the people they talk to is Sean Gilbert, of Gilbert Orchards in Yakima. The story offers a good look at how trade policy (and the current uncertainty) impacts business decisions.
Gilbert’s business, which employs the equivalent of 800 people full time and counts big-box retailers such as Walmart Inc. and Costco Wholesale Corp. as domestic customers, has been hit hard by the trade wars. The operation typically exports a third of its production, according to Gilbert, but shipments from the most recent harvest are down 25 percent from the previous year.
Trump’s trade wars haven’t crimped only Gilbert’s revenue; they’ve also eaten into his future profits. Instead of replanting 180 acres of the 2,000 or so he manages with new varieties like the Cosmic Crisp that fetch premium prices, he scaled back his plans last year to 120 acres.
For Washington’s apple industry overall,
. . . growers’ exports have fallen almost 30 percent since last spring. “We’ve been through these kinds of things before, but not with as many markets,” says Mark Powers, president of the Northwest Horticultural Council. “It’s not like we can divert the millions of cartons that are going to India to Costa Rica.”
As the story notes, agricultural groups are broadly in favor of trade agreements, and this position is historical:
In the year since the Trump administration launched its tariff offensive, the country’s trade partners have retaliated by hiking duties on apples, cherries, ginseng, sorghum, and soybeans, to name a few crops. It’s a familiar pattern: American farmers have long borne the cost for protectionist policies pushed by the country’s industrialists. The 1828 “tariff of abominations” designed to safeguard Northern manufacturers from an influx of lower-priced imports from Britain was opposed stridently in the agrarian South. It led to a political crisis that dogged Andrew Jackson’s presidency and precipitated South Carolina’s first threats of secession.
(For more on all that, I recommend Douglas Irwin’s Clashing Over Commerce, a complete history of trade policy in the U.S.)
Today, Bloomberg reports, “China is considering a U.S. request to shift some tariffs on key agricultural goods to other products so the Trump administration can sell any eventual trade deal as a win for farmers ahead of the 2020 election, people familiar with the situation said.”
Categories: Categories , Economy.