In the News

Wall Street Journal
William Mauldin

For Kansas farmer Dan Atkisson, tensions over trade surfaced weeks before President Donald Trump announced plans to slap tariffs on imported steel and aluminum.

On Feb. 4, Mr. Atkisson woke up to news Beijing had launched an investigation into alleged American dumping of—and subsidies on—sorghum, a grain known as “milo” in western Kansas. Mr. Atkisson, 32 years old, grows one variety of sorghum to feed his cattle but devotes most of his fields to “grain sorghum,” which in large part is exported to China.

Beijing’s probe, which some in Kansas fear could end in painful tariffs on American sorghum, came shortly after the Trump administration imposed tariffs on solar cells and washing machines in January.

Some saw China’s move as retaliation against those tariffs. “Countries sometimes utilize these issues to send messages,” said Sen. Jerry Moran, a Kansas Republican who hails from the same county as Mr. Atkisson. “In this case, the message China was sending hits agriculture in the middle of the country.”

After the Chinese probe hit the news, the price offered for sorghum by Mr. Atkisson’s local co-op dipped 26%, before recovering. Within hours, Mr. Atkisson and other sorghum growers were on their way to Washington to complain to the White House, to Mr. Moran, and to the other Kansas senator, Republican Pat Roberts.

China’s sorghum move amounts to a foretaste of what U.S. farmers and manufacturers might face now that Mr. Trump has announced a plan to slap 25% tariffs on steel imports and 10% on aluminum. The White House is also looking at options for punishing China broadly over intellectual-property violations.

In 2009, the Obama administration imposed tariffs on Chinese tires in a similar “safeguard” case to Mr. Trump’s recent solar and washer cases. China hit back by penalizing U.S. chicken, which caught the attention of Democratic senators from Delaware and lawmakers from other states that rely on chicken production.

Chinese officials “typically always do retaliate,” said Ron Kirk, the former U.S. trade representative when tariffs were imposed in 2009 on Chinese tires. But Mr. Kirk added that “the fact that China is going to retaliate is not a compelling enough reason to not stand up and fight for America’s workers and farmers.”

China denies its sorghum investigation is a form of retaliation. A spokesman for China’s foreign ministry says it is “merely a normal individual case of trade remedy investigation.”

Yet Chinese state media warned that Beijing’s potential responses to further U.S. trade restrictions include limits on American beef imports, a soybean tariff investigation and reduced purchases of Boeing Co. planes by government-owned airlines.

“The easiest solution would be for U.S. leaders to realize as soon as possible that China is not a tamed sheep they can manipulate,” the Global Times wrote last month in an editorial.

The list of countries vowing to hit the U.S. with punitive countermeasures over steel is growing, with China, Canada and the European Union all saying the steel and aluminum tariffs are unacceptable. As often as not, any agricultural retaliatory measures would hurt exporters from rural communities that overwhelmingly voted for Mr. Trump during the 2016 election.

Economists say bigger crops are at risk, including soybeans, whose exports to China last year reached $12.4 billion. Other countries could target U.S. dairy, almonds, blueberries, apples, beef, pork and wine.

“There’s reason for anxiety, there’s reason to understand that we need to have efforts that make sure that agriculture’s not harmed in a way that would be hurtful in any kind of tariff negotiations or whatever we do on steel, aluminum or intellectual property,” Agriculture Secretary Sonny Perdue  told reporters at a commodity conference on Wednesday, before the U.S.’s steel tariffs were announced.

Sorghum farmers, like other growers of major U.S. crops, have a safety net, including government subsidies when prices fall below a set price or when farmers’ revenue declines below a certain level. Farmers can also benefit from a government-run crop-insurance program.

U.S. sorghum producers say these supports are all within the scope of what is allowed under the rules of the World Trade Organization, and they reject Beijing’s accusations that they dump their product at unfairly low prices in China.

For the farmers of western Kansas, sparse rain makes it hard to grow corn, so sorghum is often grown in the same field year after year. The crop was routinely fed to U.S. livestock, made into ethanol or sent as feed to Mexico, but since 2014, China has gobbled up exports averaging more than $1 billion a year.

Mr. Atkisson, who serves in a sorghum growers group, says the price drop at local grain elevators means some Kansas sorghum is already being sent to ethanol distilleries in the region instead of being shipped abroad. Any tariffs that lowered sorghum prices could displace some corn in ethanol production, he said.

After the Chinese probe hit the news, Mr. Atkisson and other farmers used their prearranged trip to Washington to tell Ray Starling, Mr. Trump’s special assistant for agriculture, about the difficulties in sorghum.

“He reinforced to us that the president is aware of the situation,” Mr. Atkisson said, “and he knows that our crop has been impacted.”

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