Although President Donald Trump’s trade tactics have disturbed commodities and stock markets, U.S. Rep Greg Gianforte said after meeting with the president’s economic adviser last week he’ll wait for results.
Montana’s first-term Republican representative said he and other House members met Friday with Larry Kudlow, new chief economic adviser to President Trump. Gianforte said Kudlow asked for patience as the United States and China work out trade differences ignited by Trump calling for tariffs on aluminum and steel. China has responded by threatening a tariff of 25 percent on 103 U.S. products, including beef and hard red spring wheat, a Montana specialty.
“Understand that we have a unique man in the president’s office. He’s doing a very public negotiation, and I will say to his credit he is standing up for America’s interests,” Gianforte said. “I am concerned about the potential impact on Montana ag producers, but I trust the president, that he’s working to an end point that will be helpful.”
The potential trade war with China, coupled with the United States’ withdrawal from the 11-nation Trans-Pacific Partnership, has Montana farmers and ranchers nervous. China bought about 13 million bushels of Montana wheat last year and was on track for similar purchases in 2018, according to U.S. Wheat Associates data.
But the bigger issue is TPP. Montana produces about 200 million bushels of wheat annually, according to the National Agricultural Statistics Service. Roughly 80 percent of the crop is exported, with Japan being a major buyer. Japan under TPP will soon be offering more favorable wheat and beef terms to U.S. competitors, like Australia.
A year ago, Trump promised to replace TPP with bilateral trade agreements. Agriculture Secretary Sonny Perdue affirmed that commitment to Montana farmers while visiting the state in June 2017. But trade agreements take time, and U.S. trade officials haven’t produced a bilateral agreement with Japan to replace TPP, a multilateral agreement that was originally initiated by the United States. Republicans and Democrats alike panned TPP during the 2016 presidential campaign.
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In the last two weeks, Trump has indicated that he supported re-engaging in TPP, but has also said there were “too many contingencies” in the multilateral agreement and that bilateral trade agreements were better.
Gianforte said TPP didn’t come up during the Kudlow meeting. Trump’s chief economic adviser spoke of China and the retooling of the North American Free Trade Agreement, echoing Trump’s frequent remarks that NAFTA talks are going well and should produce amended terms soon.
Montana’s delegation has been asking that Canadians be required to grade Montana wheat fairly. Currently Hi-Line wheat trucked for sale to elevators in Canada is graded as feed quality, because Canadians don’t recognize many U.S. wheat varieties. Feed wheat pays the least of any wheat grade.
Gianforte said the wheat did not come up during the Kudlow meeting, though the representative has raised the issue with U.S. Trade Representative Robert Lighthizer. The congressman has also asked that the U.S. tariff on Canadian softwood lumber continue.
The overall message of the Kudlow meeting was patience on all fronts.
“Larry Kudlow also asked us for some patience as this negotiation continues. And of course we pressed him on ‘How much patience are you asking for?’” Gianforte said. “He was talking about one or two months and he was asking for patience so that the administration could complete their negotiations. No one wants a trade war. Larry Kudlow communicated that the administration doesn’t want a trade war. They understand that their current path is creating frustration and volatility in the markets, but it’s for a good purpose,and that is to represent America’s interest, to make sure that we continue to have open markets for our products, both ag products and manufacturing products.”