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John Block: Tariffs

By former USDA Secretary John R. Block

Just when I was so comfortable with President Trump’s follow through with so many of his campaign promises – conservative judges, tax reform, cuts in regulations, and securing our borders. The stock market has soared more than 30% since he was elected. Suddenly, last week, he announced his plan to impose a 25% tariff on imported steel and 10% on aluminum. That has shocked a lot of people in the U.S. and countries around the world. We probably should not be shocked. During the campaign, Trump promised to fix our huge trade deficit. He has always believed that we have been duped in global trade deals.

Farmers, ranchers and the whole Ag industry are worried about the risk that this could escalate in to a trade war. We are already in difficult negotiations with Canada and Mexico over the North American Free Trade Agreement (NAFTA).

The tariffs, if enacted, would directly impact Canada and Europe more than China. We have a $375 billion trade deficit with China. China accounts for 50% of the global steel making capacity according to the Organization for Economic Cooperation and Development. That is up from 15% in 2000. It is obvious that their industry is highly subsidized. China is not so much better than the U.S. that they deserve to sell to us $375 billion more that we sell to them. It is hard to see how the tariff proposed can force China to stop manipulating trade. President Bush imposed tariffs on China and they didn’t work. He pulled them back.

The Ag industry is afraid some of our biggest customers for our corn, soybean, pork and beef will retaliate. They could close the door on our exports. Our industry is already suffering with low prices.

Another concern is that the tariffs will raise the cost of what we make from steel and aluminum. Consumers will pay the price. A can of beer in an aluminum can might cost a penny more. I was reading some statistics, and I don’t think the added consumer cost would even be noticed.

President Trump has said that if Canada and Mexico will accept necessary reforms of NAFTA, then they won’t have to pay a tariff.

It has been 40 years since we ran a trade surplus. We do need to skinny down our huge trade deficit. But is this the way to do it?

John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill.  If you would like to review his radio shows going back more than 20 years, visit

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