Kudos for Trump

HAVE we ever had a more effective agriculture minister than Donald Trump? Or trade minister, for that fact. I jest not.

The US President is currently doing more to advance our agriculture exports than any of our homegrown officials could ever dream.

It started with his refusal to join the Trans-Pacific trade pact. That deal would have created a trading block of 12 nations covering 40 per cent of the world’s economy. It would have meant tariffs between those countries would have been cut or eliminated to allow freer trade between nations. It would have given everyone a decent crack at trading products on their merits.

Instead, Trump opted out, in a misguided attempt to pander to a populist base that doesn’t appear to understand how the world works.

That would be a base predominantly in the mid-states of the US, those states which rely on exporting their agricultural and manufactured products more than any other part of the country.

And those are the very parts of the economy that have and will suffer from Trump’s misguided action, now that the other 11 nations have decided to continue with the pact. One example is grain. US grain farmers have enjoyed privileged and profitable access to the Japanese market since not long after World War II.

But now that Australia and Japan are part of the new TPP, US farmers have lost that advantage and are actually at a disadvantage because of the removal of tariffs on Australian wheat into Japan.

In fact, it is estimated that US farmers will now be at a disadvantage of about $US65 a tonne on wheat traded to Japan. That is a fair whack when a tonne of grain is trading for about $US200.

But it’s about to get worse for US farmers — and possibly better for Australian farmers — with Trump’s latest attempt to defy economic gravity and impose tariffs on steel and aluminium imports into the US.

That move looks increasingly likely to trigger a trade war, in which those countries that do send steel into the US will retaliate by imposing tariffs on American products. And heading that list of goods will be agricultural products, particularly soybeans, wheat and beef.

While Trump’s TPP folly has wounded his wheat farmers, the steel and aluminium tariffs run the risk of crippling entire states — the states that elected him.

It could easily send states that rely on agriculture, such as Iowa, Wisconsin, Nebraska and South Dakota, into a downward spiral that could take a generation to reverse.

Waiting in the wings will be Australian farmers who will gladly supply the food the United States currently supplies to countries such as Japan, Korea and China.

For all the talk of Russia, family business deals and sexual misconduct, this could be the thing that destroys Trump.

Because while those other issues don’t affect the everyday lives of most Americans, losing 10, 20, even 50 per cent of your income sure as hell does.

• Ed Gannon is publisher of The Weekly Times and co-host of The Ag Show on Sky News Business