How The U.S.-China Trade War Is Impacting Nebraska And Its Major Exports

May 14, 2019
Originally published on May 14, 2019 6:25 pm
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AUDIE CORNISH, HOST:

A little squabble - that's how President Trump described the escalating trade dispute between the U.S. and China today. It's a squabble that could have major consequences for the state of Nebraska. Nebraska had $1.4 billion in exports to China in 2017 according to the US-China Business Council. That number was cut in half last year as China imposed steep tariffs on beef, pork and soybeans. With both countries announcing plans for new tariffs yesterday, there's no sign that a trade deal is imminent. And for more on what that means for Nebraska, I'm joined by the state's governor, Pete Ricketts. He's a Republican. Welcome to the program.

PETE RICKETTS: Thank you very much for having me on. I appreciate it.

CORNISH: A year into this trade war, what are the impacts you're seeing in Nebraska?

RICKETTS: Well, we're seeing a variety of things. I mean, low commodity prices were one of the things we experienced beforehand. Some of your listeners may have seen about the flooding we had a couple of months ago. And then, of course, you know, we're looking to have markets open up for us. And China obviously is one of our bigger markets. It's our biggest market for ag. So we're following the trade talks with China very closely.

CORNISH: It seems like the two sides were close to an agreement. Then the administration announced the most recent round of U.S. tariffs last week that led to retaliatory tariffs by China. Do you support the president on this move that's essentially escalated the trade conflict?

RICKETTS: Yeah. The folks here in Nebraska want to see that we have a relationship with China and we start getting back to more normal trade relations so we can, you know, sell more products like soybeans. However, people also understand that we've got to have a fair trade deal and that if China is stealing our intellectual property, as the media has oftentimes reported on this, that that doesn't fall into that category of a fair trade deal. It's got to be something where both parties benefit. And so...

CORNISH: So do you support what the president is doing?

RICKETTS: Oh, I do, yeah, absolutely, for just that reason is that we've got to have a fair trade deal with China. And I think the president has rightly identified that China thinks about these things in decades, you know, with regard to relationships. And certainly President Xi has stated his goal to make China the world power by 2049. And so I think the president has understood that we've got to have a relationship with China where it's a mutually beneficial one and one where it's fair. And that's what he's trying to accomplish. Obviously, we'd like to see this thing get wrapped up as quickly as possible. But I do think these important issues around intellectual property have to be addressed.

CORNISH: Are you essentially telling farmers in your state, look; there's going to be a fair amount of pain first, but it's going to be worth it in the long run?

RICKETTS: Well, actually, they're the ones by and large telling me that. So they are the ones who are telling me that, hey, we support what the president is doing. We don't necessarily, you know, appreciate the pain we're going through right now. You know, they'd like to see this get opened. But they also understand that this is an important relationship that is fair and balanced on both sides. So that's what I hear when farmers tell me about it.

CORNISH: I'm surprised to hear that because the state farm bureau said flooding this year caused hundreds of millions of dollars in agricultural losses. And now you have this tariff issue on top of that. I mean, there are farmers that are really struggling right now.

RICKETTS: Oh, absolutely. And that's one of the things - reasons why we would like to see this relationship get to be more normalized. But we also got to remember low commodity prices are something that we've been struggling with here in farm country since 2013. You know, that's when farm income started going down. You know, the tariffs have not caused low commodity prices. That's something we experienced beforehand.

CORNISH: So in the short term, the president has said he'll use revenue from U.S. tariffs on China to provide $15 billion in aid to American farmers who are feeling the impact. You know, just last year, you had folks like Senator Sasse saying that the trade war was cutting the legs out from under farmers and called, you know, the aid plan gold crutches. How much longer can farmers get this support from the federal government?

RICKETTS: Well, I think everybody recognizes that an aid program like that is a temporary solution. That's not a permanent solution. It's really meant to be able to help tide farmers over as the president works on these trade deals. So I think that those things are helpful, but I think everybody recognizes that they're short term in nature.

CORNISH: Nebraska Governor Pete Ricketts, thank you for speaking with ALL THINGS CONSIDERED.

RICKETTS: My pleasure. Thanks for having me on. Transcript provided by NPR, Copyright NPR.