News

KOIN: NW farmers face 'crisis, disaster' in trade war
Author: Emily Burris
Posted: May 15, 2019

To read the original KOIN story, visit here.

An ongoing trade war between Beijing and Washington D.C. is taking a toll on farmers across the United States, including those in Oregon and Washington. 

China is looking to import certain crops from other countries rather than pay the new tariffs President Donald Trump has proposed. 

Farmers are accustomed to weathering the typical ups and downs of the market but growers and producers are already hurting under the current tariffs imposed last year when the trade war started to escalate. 

Growers in Oregon and Washington are already losing market share, which leads to higher inventory and lower prices. 

Representatives from the Oregon Wheat and Potato Commissions — two of the region's larger export crops — say the industry will see significant financial losses and layoffs within the next couple of years if the trade standoff continues. 

"You don't buy farmland without going into debt, you don't buy equipment without going into debt," said Oregon Wheat Commission CEO Blake Rowe. "So to not cover your costs of production for a young farmer without reserves — that's a crisis, that's a disaster." 

According to Rowe, wheat is one of the top 6 agriculture products in Oregon with over a million acres growing wheat crops and the vast majority of soft white wheat grown in Oregon is exported. 

"In a competitive world market, you apply a competitive tariff to U.S. wheat and none of the customers want to buy," said Rowe. "We've basically lost those sales to the tune of $300 million worth of wheat in less than a year." 

Meanwhile, the situation is also getting tense for potato farmers in Washington and Oregon — the second-and third-largest growers of potato products in the U.S., respectively. 

Gary Roth, executive director of the Oregon Potato Commission, said if Oregon can't keep up with delivery demands of potatoes, then the entire country will "run the risk of not getting that market share back." 

"We have to export to maintain that level of production, that level of economic impact that is positive — particularly for the rural communities of states like Oregon and Washington," Roth said. "And if we can't export then we're just going to have to rely on domestic sales and that does not bode well for the Oregon potato industry."

But, according to Roth, the industry has already seen a major decline in potato exports in recent years. He projects that if the decline isn't corrected in the next 2 years, jobs could be on the line. 

Currently, Oregon and Washington employ about 45,000 people in the potato growing and processing sector. 

Not just agriculture

It's not just the growers and producers of crops who stand poised to suffer under the tariffs in Oregon: tens of thousands of jobs in the tech sphere are also caught in the crosshairs. 

Hiro Ito, the professor and department chair of economics at Portland State University, said China is the "largest trading partner for Oregon" and the state's exports of semiconductors account for about $2 billion — about half of all of Oregon's exports to the country. 

"Right now, one estimate says the cost of tariffs is about $500 per American household per year and this figure is before the new tariff policy was announced, so that's going to go up," Ito said. 

Ripple effect

Ongoing trade negotiations with other countries like Mexico, Japan and Canada are also having an impact on trade with other major markets. 

"The problem is, [China and the U.S.] account for more than 40% of the world GPD," said Ito. "So if there's negative things happening in these 2 economies then that means 40% of the world's economy can be affected."

Trump has offered to bail out farmers with approximately $15 billion of tariff revenue but many farmers say they'd rather have a firm trade deal.