U.S. Treasury Secretary Steven Mnuchin said in late March that he didn’t expect President Trump’s tariff announcements to have “a big impact on the economy.” He even went so far as to say that “what we’re doing is long-term very good for the economy.”
Mnuchin is a film producer, with one foot in Hollywood and the other in Wall Street. It’s clear he has never set foot on a California farm, although he no doubt has shared in the harvest.
So when the treasury secretary talks about “the economy,” he may be talking about his economy, but clearly isn’t talking about ours —the nearly half-billion-dollar annual agricultural economy in San Benito County and southern Santa Clara County.
Surely, Mnuchin and his boss anticipated that China would respond to initial steel and aluminum tariff threats from the U.S. with its own tariff threats aimed directly at U.S. farmers, in both red and blue states. China followed its initial announcement early this month of 15-25 percent tariffs on nuts, fruits, wine and vegetables—California’s key exports—with a second announcement a week later of more tariffs targeting the Midwest’s giant soybean producers.
Among the Chinese targets are some of the biggest money crops in San Benito County and southern Santa Clara County—fruit, nuts and wine.
China did not indicate when the tariffs would go into effect but said it would implement them in two parts. The first part would affect 120 U.S. products valued at $977 million, including fresh fruit, dried fruit, nuts and wine, with a 15 percent tariff, if China fails to reach an agreement with the United States.
The list of Chinese tariff announcements reads like a shopping list for the top agricultural products of our two counties, products that are produced by our friends and neighbors, real people whose livelihoods are threatened by the callous and arbitrary policies being pursued in Washington.
Our farmers stand to lose momentum in a worldwide competition for a share of the rapidly expanding Chinese consumer market.
In San Benito County, here are some of the top crops threatened by the possible trade war, with their total domestic and international 2016 sales:
- Fruit and nuts crops: $49.4 million
- Salad greens: $43.9 million
- Peppers: $33 million
- Romaine lettuce: $32.9 million
- Wine grapes: $31.1 million
- Spinach: $25.3 million
- Kale: $19 million
- Onions/garlic: $12.9 million
Here are the some of the threatened producers in Santa Clara County, with their total domestic and international 2016 sales:
- Mushrooms: $79 million
- Peppers: $21.4 million
- Spinach: $16.6 million
- Tomatoes: $17.5 million
- Lettuce: $14.7 million
- Wine Grapes: $7.6 million
- Garlic: $6.5 million
- Beans: $6 million
- Celery: $5.2 million
- Salad greens: $4.2 million
- Broccoli: $2.4 million
- Cabbage: $1.9 million
“We’re not afraid of a trade war but that’s not our objective,” was all Mnuchin could say this month. He says he is hopeful the tariffs on China can be avoided through negotiation, but as the situation deteriorates, the Trump administration is prepared for an escalation of its trade dispute with China. “There is the potential of a trade war,” Mnuchin admitted this month.
The looming trade war won’t serve the interests of U.S. farmers or U.S. consumers, but plays well to the President’s America First rhetoric aimed at his political base. It’s time for agricultural producers to flex their muscles, and to demand that our Congressional representatives stand up to the President and halt this trade war before it starts. Instead of the “win-win” predicted by Mnuchin, it sure looks like a “lose-lose” situation from here.