Arkansas Steel and Arkansas Farming: Farm Bureau and U.S. Rep. Crawford Differ On Trump Tariff

Mar 7, 2018
Originally published on March 7, 2018 7:46 am

Agriculture officials in Arkansas are concerned President Trump’s proposed steel tariff could have consequences that would negatively impact the industry. The administration has floated a 25 percent tariff on imported steel and 10 percent on aluminum

But U.S. Representative Rick Crawford, who represents one of the nation's highest steel producing counties along with some of the state's most fertile Delta lands, says it's time to take some action in a trade war he says China's already been waging for years.

“I want people to understand that the steel industry was not off the cuff, ‘Hey let’s go after China.’ This is a result of years of bad actions by China. Folks say, ‘Well you don’t want to spark a trade war.’ I would argue that we’re already in a trade war and that maybe this is our first salvo in response to what China has been doing for many, many years,” said Crawford. “I think it’s appropriate for us to take some kind of action and I don’t think the steel industry wants to hurt its own domestic customers.”

While the industry has lost its world share of the market in recent decades and lost hundreds of thousands of jobs, Arkansas has had a good few years in the steel trade. Steel production in Arkansas has shot up 40 percent since 2009, according to the Arkansas Economic Development Commission, with the investment of over a billion-dollars in state-of-the-art mills in Mississippi County. 

The industry employs about 5,500 direct jobs in Arkansas but as is the case throughout many advanced nations steel jobs are being lost not just because of competition abroad but because of revolutions in technology and mill modernization. The Big River Steel project near Osceola boasts of its use of artificial intelligence on its website.

Big River Steel has partnered with Noodle.ai, a California enterprise artificial intelligence (AI) company, to implement the “world’s first smart steel production facility.” Big River is now equipped with AI systems to optimize maintenance planning, line scheduling, logistics operations and environmental protection.

Crawford's optimism on steel coincides with apprehension about the tariff from state agricultural leaders. The Republican House member spoke with members of the Arkansas Farm Bureau on Tuesday.

AFB spokeswoman Brandy Carroll, says the organization is concerned with how other countries might retaliate against the tariff, w. The $16 billion industry is the state's largest, according to the farm bureau.

"Certainly any time we are talking about tariffs, there is some concern because retaliation can and does frequently target agriculture production," says Carroll. "Recently the administration imposed tariffs on, I think, washing machines and solar panels, and China immediately retaliated against grain sorghum. Those are the kinds of things that concern us if they would impact our ag exports."

Retaliations from the tariff could have an indirect impact on the state's agriculture exports, she said. 

"China for one, they import a lot of chicken from us, a lot of soybeans from Arkansas and a lot of cotton from Arkansas. Canada imports a lot of rice and other products from Arkansas. Those are the kinds of things we worry about having an impact."

Carroll says the direct impact of the tariff could lead to an increase in agriculture equipment like tractors and combines. According to Market Watch, Arkansas ranks at number five out of states most threatened by the steel tariff. 

Mike Preston, Executive Director of the Arkansas Economic Development Commission, recently told television station KTHV, channel, "It makes me a little nervous about a retaliation from China where one of the first things they could go after is agriculture." 

While Congressman Crawford acknowledges that agriculture is traditionally a first target in trade disputes, he thinks much of the rhetoric from other nations will ring hollow, "I think there’s a lot of bluster here because China just absolutely cannot get by without U.S. agriculture commodities, primarily soybeans but others as well."

China would not be the only nation weighing how to respond. China is the subject of rhetoric around the tariff issue because it produces 49-percent of the world’s steel but it only accounts for about $2-billion of the $27-billion of steel the U.S. imports annually. Canada is the primary source of U.S. imported steel. Our neighbor to the north is also our number one trading partner.

The tariff idea splits traditional political lines. Some of Crawford’s Republican colleagues call it a new tax that’ll spill-over onto consumer goods and other industries. While organized labor has praised the move for protecting U.S. jobs. Senator Ben Sasse in Nebraska say its sounds like a “leftist” policy of “protectionism.” Meanwhile, U.S. Steelworks President Leo Gerard has praised the President saying it’s an area where former President Obama faltered.

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