News & Features

Trade Disputes Mark Beginning of 2018

Montana tries to keep up as the president continues to make new decisions on major global trade deals

With a decision to impose tariffs on steel and aluminum imports, President Donald Trump continued to shake up trade issues in the U.S.

It was a surprise move for many in Washington D.C., including a good chunk of the Republican Party. GOP members, including Speaker of the House Paul Ryan, expressed concern about the consequences such tariffs could have on American consumers.

The president, however, said trade wars are “good” and “easy to “win” after proposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum.

Republicans in Congress have also approached the president about re-engaging with the Trans-Pacific Partnership, or TPP, a trade agreement with 12 nations bordering the Pacific Ocean. Trump withdrew the U.S. from the TPP almost immediately upon taking office.

Montana Sen. Steve Daines was one of 25 Republicans to sign onto the Feb. 20 letter, which asks the president to reconsider his actions on the TPP, since the 11 remaining countries in the TPP are moving forward with the agreement. It would also be an effective tool to counter the influence of China on the market, the letter stated, and the TPP could be a new way to modernize trade with Canada and Mexico.

“I agree with President Trump we need free, fair, smart trade, we need an America-first trade deal, but we can accomplish that by engaging in this trade agreement,” Daines said in an interview last week. “I’m not asking him to approve and agree to the existing TPP agreement, I’m saying let’s reengage in these negotiations.”

When the U.S. withdrew from the agreement, Daines said, it left a vacuum, which China may fill.

These trade agreements affect farmers and ranchers in particular, Daines said, given that agricultural exports represent $4.6 billion of the state economy as well as the biggest industry in Montana. Daines said that without the TPP, the tariffs on beef in Japan went to about 50 percent. With the TPP, that tariff would have been 9 percent, Daines said.

“By withdrawing from this trade agreement, it puts Montana ranchers at a disadvantage because Australia can ship their beef into Japan,” Daines said.

Reengaging in the TPP would allow the U.S. back at the negotiating table.

“It is not a perfect agreement,” Daines said. “The time to act is now because if we don’t, they are going to move on without us. The loser here will be the American worker, the loser here will be Montana farmers and ranchers.”

Trump has also said he’d like to renegotiate the North American Free Trade Agreement, or NAFTA.

Montana Democratic Sen. Jon Tester said the Trump administration is unpredictable on trade, and that Montanans need more stability.

“The uncertainty created by this administration on trade is very concerning to our state’s number one industry,” Tester said. “Montana’s farmers and ranchers need predictability to make ends meet. Montana needs fair trade agreements that do right by American workers and open up opportunities for Montana ag products.”

Daines said he’s had several conversations with Treasury Sec. Wilbur Ross about NAFTA, and that the agreement needs to be “better” for states whose primary industries are agricultural.

“Let’s make sure we don’t lose sight of putting American interests first, particularly for our farmers and ranchers,” he said. “The more ag-focused states have been giving feedback about NAFTA and making sure Montana farmers and ranchers aren’t losing share in the global market.”

Daines said it is “short sighted” to disengage from trade in global markets, though he said the agreements would need to be “fair” to the U.S. for the country to get back on board.

“But to completely disengage in this global economy puts Montana farmers and ranchers at risk,” he said.