by Rep. Ron Estes
The Washington Examiner | April 16, 2018 12:00 AM
President Trump recently suggested farmers will end up “better off” after confronting China on trade but acknowledged it will “take a little while to get there.” He understands that enlisting farmers as front-line troops in a protracted trade war won’t end well. I believe, and I think the president believes, that free and fair trade is the right policy.
What’s surprising is how many Democrats in rural and Midwest states seem to not only want a trade war but want the Chinese to win. They are so obsessed with Trump failing they’re willing to sacrifice American agriculture on the altar of the #Resistance.
One member of Congress, Rep. Cheri Bustos, D-Ill., accused Trump of breaking promises to rural voters and said the president “needs to make sure he doesn’t treat us like flyover country.” Democrats are carrying the water for the Chinese in their effort to separate the president and Republicans from their political base. Democrats in Kansas are echoing this argument. This rhetoric is precisely what the Chinese hoped to hear when they announced tariffs on 106 America products including soybeans and airplanes.
The current debate about trade shows that Midwestern states, including Kansas, have long been leaders in the global economy. The irony is the coastal elites who tolerated China’s unfair trade practices created the untenable situation Trump is now confronting.
China has clearly engaged in predatory policies that have harmed American workers — including the theft of American intellectual property, which costs us jobs.
Kansas agricultural producers and aerospace manufacturers stand to benefit greatly in the long run from free and fair trade. We have an enormous stake in the outcome of the showdown with China.
China is targeting soybeans because they’re a huge percentage of our agricultural exports. American farmers sold $12.4 billion worth of soybeans to China last year, which accounted for more than half of our $19.6 billion in total agricultural exports to China. Kansas exported $925 million of that amount. Our state’s total agricultural exports totaled $4.5 billion in 2016 and supported 36,000 jobs. China fully understands American farmers are facing droughts and hardships. Farm income was projected to decrease nearly 7 percent this year according to the Department of Agriculture, even before China announced their tariffs.
China is likewise targeting aerospace because, in 2017, America’s top export to China was aircraft and associated equipment. This industry is vital to Kansas. Two-thirds of the world’s embedded general aviation fleet was manufactured in Kansas. Spirit AeroSystems, the world’s largest independent producer of commercial aerostructures, recently celebrated completion of the 10,000th Boeing 737 fuselage at its Wichita production facilities. More than 32,000 people are employed in aerospace in Kansas, with highly skilled workers at Cessna, Learjet, Airbus, Spirit AeroSystems, and over 350 aviation suppliers and service providers.
While I support the president’s strong negotiating posture, I urge him to be more strategic in implementing tariffs and trade policy. It isn’t just the agriculture and aerospace sectors in our state that are concerned. Since 1951, Hunter and Son Construction in Wichita has been an innovator in the foundation repair business. The price they pay for steel is up 24 percent since March 1, which has increased the cost of a typical residential job from $10,000 to $13,000. The company, which had been growing — even in the Obama recession — is now looking at laying off employees because of cost increases and a slowdown in their business.
Wichita architectural manufacturer company Balco told me they’ve seen aluminum prices increase 12-15 percent in the past year. They’re working to avoid passing the costs along to consumers and are tightening their margins. Balco is also concerned tariffs could impact their ability to sell products in international markets.
The good news, however, is Trump’s confrontational approach seems to be working. President Xi Jinping of China this week renewed his vow to support open markets and additional imports. I believe each side views a trade war as a lose-lose proposition. In a trade war, each side takes itself hostage and begs the other side not to shoot.
The fact is Xi is leading a first-world economy that has grown accustomed to third-world trade practices. He knows he can’t have it both ways any longer. China can’t shake down American companies for their intellectual property if they want Chinese companies to be treated fairly in foreign markets.
This takes place with ongoing negotiations to modernize NAFTA. President Trump’s administration has been working with our trade partners Mexico and Canada to find common ground on a free and fair trade policy. We need to modernize and update NAFTA and provide a permanent agreement with no sunset to give certainty to the economies of Midwestern states like Kansas that depend on exports.
To some trade skeptics, globalization is a dirty or conspiratorial word. But it’s a reality of life. Farmers, ranchers, and manufacturers in states like Kansas provide the products for global trade. The interconnectedness of today’s global economy is the product of American ingenuity and innovation. That should be a source of pride rather than division.
The global economy doesn’t have a reverse gear. Trump is putting America in the driver’s seat and making sure the rules of the road are fair.
Rep. Ron Estes, a Republican, represents Kansas’ 4th Congressional District in the U.S. House of Representatives.