WASHINGTON, D.C. (KELO) — The farmers union and South Dakota’s Congressional delegation are in separate corners when it comes to the latest developments in the trade war. On Friday, President Donald Trump announced phase one of a trade deal between the United States and China.
“I say affectionately that the farmers are going to have to go out and buy much larger tractors because it means a lot of business, a tremendous amount of business,” Trump said.
Doug Sombke is the president of the South Dakota Farmers Union. His group represents more than 16,000 members in the agriculture industry.
“Believe me, we’ve got smarter farmers than that as members of the South Dakota Farmers Union. I don’t need to tell them how to manage or read that type of malarkey,” Sombke said referring to the president’s call to buy larger tractors.
The South Dakota Congressional delegation has been pressuring the Trump administration for the past 17 months to wrap up the trade war and find relief for farmers.
Sombke, who we talked with by phone from his Spink County farm, said he is very disappointed in Sen. John Thune (R-SD).
“Extremely disappointed because he’s got the power, he is one of the top dogs in the Republican party and yet South Dakota has nothing, nothing to show for his actions,” Sombke said. “I am terribly disappointed, especially in agriculture and of course that’s my world, so that’s why I’m upset.”
Thune’s communications director Ryan Wrasse responded to Sombke’s statement.
“The South Dakota agriculture community deserves far more than politically motivated and patently false cheap shots in these tough times. The state’s farmers and ranchers know Sen. Thune won’t be outworked by anyone when it comes to agriculture policy, and that means far more than Doug’s extreme partisanship, which appears to have clouded his judgement,” Wrasse said.
Sombke has served as president of the union since 2005 and was re-elected earlier this week to another term.
“I am constantly talking to the president and USDA leaders to ensure South Dakota producers’ concerns are addressed,” Thune said.
As for Friday’s announcement of phase one, South Dakota’s senior senator and majority whip, said he is looking forward to reviewing the details of the agreement.
“I am hopeful this deal will be a win for our state’s farmers and ranchers,” Thune said.
You can read Sen. John Thune’s full statement responding to critisizm from the SDFU president at the bottom of this article.
What is “phase one?”
The phase one deal, according to The White House, requires structural reforms and other changes to China in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.
The White House said that the agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years.
The U.S. will keep 25 percent tariffs on $250 billion worth of Chinese imports, along with 7.5 percent tariffs on $120 billion worth of Chinese imports.
In 2018, South Dakota exported $48 million in goods to China, according to the Office of the United States Trade Representative. Sombke said it’s hard to estimate the exact financial burden caused by the trade war in South Dakota, given the wet weather this year.
However, President Trump promised big returns to farmers from the Oval Office on Friday. He said that Chinese farm purchases would hit $50 billion per year.
China’s deputy finance minister, Liao Min, would not confirm that number.
“China is ready to work with the U.S. side to do more to promote growth in trade,” Min said.
The Associated Press reports that U.S. farm exports to China have never topped $26 billion a year.
U.S. Trade Representative Robert Lighthizer told reporters that China agreed to buy $32 billion in U.S. farm products over two years.
“We’ve been here before,” Sombke said. “We’ve seen this twice before from this president and nothing came of it. So I guess I’m not ready to start throwing any real big praise anywhere yet.”
Controversy over dollars
Sombke doesn’t trust the $50 billion number being said by Trump.
“This China announcement is a big deal for American agriculture, Chinese are agreeing to ramp up to $50 billion a year in agriculture purchases. Now, that’s twice that they’ve purchased from America in any single year past. This is the shot in the arm American ag needs right now,” Rep. Dusty Johnson (R-SD) said.
Sen. Mike Rounds (R-SD) called phase one great news on Twitter.
“Improving & finalizing trade agreements is vital for SD producers & manufacturers. Look forward to reviewing the details,” Rounds said.
KELOLAND News has reached out to the White House and the Office of the United States Trade Representative to find out what exactly phase one will mean for South Dakota farmers. They have yet to respond to our requests.
A win for pork
Johnson said pork is going to be a “huge” part of this agreement.
“We’ve got a lot of pigs in South Dakota and this is going to be good news in a lot of these purchases, perhaps $20 billion or more is going to come right from pork,” Johnson said.
What’s next?
The Congressman said he is looking ahead to the next phase.
“That’s where we’re going to get some of those larger, more systemic reforms that are so important and the president has been fighting for, for quite some time,” Johnson said. “That’s also going to be big news for America.”
South Dakota and rural America have been hit hard by the trade war. China retaliated against Trump’s tariffs by taxing $120 billion in U.S. exports, including soybeans and other farm products.
Sen. Thune’s full statement:
“As a senior and longtime member of the Senate Agriculture Committee, advocating for South Dakota’s farmers and ranchers is my top priority. The 2018 farm bill was the fourth farm bill I have worked on during my time in Congress, and nearly 20 provisions I authored, inspired by South Dakota’s farmers and ranchers, were included in the bill. I am constantly talking to the president and USDA leaders to ensure South Dakota producers’ concerns are addressed. For example, in June, I met with Deputy Secretary Steve Censky and Undersecretary Bill Northey to request that USDA move up its administratively mandated November 1 date for haying and grazing cover crops on prevent plant acres to September 1. Just one week later, my request was approved, which directly benefited the South Dakota agriculture community. In recognition of my work on these issues, I was recently honored to receive the Golden Triangle Award – the National Farmers Union’s highest honor. With respect to today’s announcement, I look forward to reviewing the details of the agreement, and I am hopeful this deal will be a win for our state’s farmers and ranchers.”
Sen. John Thune (R-SD)
