Trade war fosters air of uncertainty

ONE criticism of the Obama administration was that many of its policies created uncertainty in the business and manufacturing sectors, hindering the potential for economic growth. President Trump’s trade policies, in time, could do the same.

In his quest for “fair trade,” Trump has imposed tariffs on goods imported from China, Mexico, Canada and the European Union. Not surprisingly, those countries have done the same, and Oklahomans are feeling the impact.

According to a report from the U.S. Chamber of Commerce, 401,000 Oklahoma jobs are supported by trade, and roughly $208 million in state exports are threatened by the new tariffs.

The Oklahoman’s Hannah Pike wrote this week about the tariffs’ toll on the state’s agriculture and energy interests. Roy Lee Lindsey, head of the Oklahoma Pork Council, noted that pork farmers exported 27.5 percent of their product in May. Consequently, “We’re certainly concerned” about the tariffs, Lindsey said.

In retaliating for U.S. tariffs, China targeted products from areas of the country that supported Trump during the 2016 election. It was clearly an effort to impose pressure on Trump to reconsider, although the president shows no sign of relenting.

Lindsey echoed what many ag producers across the country have said about Trump’s strategy — that the president has pledged to take care of them, and they believe in him. “But the longer this goes on, the harder it gets,” Lindsey said.

After tweeting Tuesday that “Tariffs are the greatest!”, Trump moved to soften the blow of his policy. He instructed the U.S. Department of Agriculture to make available up to $12 billion in emergency aid to offset the estimated $11 billion impact of overseas tariffs on U.S. agricultural products.

Farmers and ranchers may be grateful for the help, although our guess is that they would much prefer to continue sending their products to other markets and forgo the assistance, instead of watching gluts appear and prices fall.

An Iowa hog farmer interviewed last month by NPR said he and others would be OK for a time, but if the trade dispute lingers, “it’s going to have severe economic consequences for U.S. agriculture.” Lindsey said something similar this week.

“If you’re talking about 60 days, that’s one thing,” he said. “You start talking about 12 months, that’s a different animal.”

Oklahoma’s oil and gas industry feels the same way. Imported steel, which is used by the industry in several areas, is now more expensive than it was a few months ago. Thus, says the head of the Oklahoma Oil and Gas Association, some wells may not get drilled or pipeline infrastructure may be slowed. That hurts producers, and Oklahoma’s economy.

“We just hope that the uncertainty doesn’t carry on for too much longer,” he said. Amen to that. Although President Trump remains steadfast, as his tweet Tuesday made clear, a drawn-out trade war has the potential to undo much of the economic good the country has witnessed during his first 18 months in office.