Midwest Mayors Say Soybean Tariffs Threaten Cities

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Soybean plants grow in a field at dusk near Tiskilwa, Ill.

Soybean plants grow in a field at dusk near Tiskilwa, Ill.


Photo:

Daniel Acker/Bloomberg News

By

Mayors in the Midwest’s soybean belt said Friday that retaliatory tariffs by China threaten cities that rely heavily on the commodity, and they urged the Trump administration to reconsider trade policies they said are already hurting their communities.

China put tariffs on $34 billion worth of U.S. goods, in response to tariffs by the U.S. that took effect just after midnight Eastern time on Friday. Soybeans are the top export targeted by Beijing’s tariffs, with about $14 billion of U.S. soybeans shipped to China last year.

The administration is arguing that it needs to confront China over trade practices that have led to huge U.S. trade deficits and illicit transfer of U.S. technology to Chinese firms. Officials say they are readying programs to help farmers hurt in the trade fight and will tap Depression-era farm subsidy programs.

The brewing trade spat is boosting overseas shipments of U.S. soybeans, but U.S. farmers have been selling below cost as traffic shifts toward Brazil.

All of this has mayors along the Mississippi River raising alarms about an expected hit to the region’s farmers and the ripple effect to cities that depend on jobs and revenue from farm-equipment manufacturers, grain marketers and transportation companies.

“This is not an urban-rural issue, this impacts all of us,” said

Frank Klipsch,

the mayor of Davenport, Iowa. The city, with a population of about 100,000, is across the Mississippi from the headquarters of farm-equipment giant

Deere

& Co., in Moline, Ill.

Mr. Klipsch said mayors in the Midwest have already been struggling with problems like flooding and extreme heat, as the anxiety over China’s 25% tax on soybeans sets in. He said many mayors had thought the trade spat would be resolved and tariffs avoided.

The top three soybean-producing states are Illinois, Iowa and Minnesota. Roughly 17 million tons of soybeans, or 30% of U.S. production, were exported to China last year.

On a conference call with reporters Friday, several mayors said they hoped to talk to the White House to understand the goals behind its trade policy and make sure the Trump administration is aware of the risks to Midwest communities affected by the soybean tariffs.

“People’s livelihoods are on the line here,” said

Jay Hollowell,

mayor of Helena-West Helena, Ark. “Can we have a conversation with the White House or the U.S. Trade Representative on where all this is going?”

Several mayors said it was hard to quantify the impact to their cities so far and that they were lobbying congressional lawmakers.

Mayor

Rick Eberlin,

of

Grafton,

Ill., said he has spoken to farmers who said they don’t expect to have the money this year to visit his city, a riverside town with river cruises, water parks and wineries. He said he has two brothers who are farmers and are worried because soybean prices had already been driven lower on trade fears before the tariffs took effect.

“We rely heavily on the tourism dollar,” Mr. Eberlin said. “The less money you have, the less you can do. That has a tremendous impact on Grafton.”

John Heisdorffer,

a soybean grower in Keota, Iowa, and chairman of the American Soybean Association, said it took the industry 40 years to develop its soybean market in China. He said he worries that even if U.S. growers only lose 10% of business, they may never be able to recover it.

“These mayors have a right to be concerned,” he said. “If we don’t make money in the farms in the Midwest, it will be a trickle-down effect and make it to the cities.”

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