Trump’s trade war with China hits home in Michigan

By: - August 6, 2019 4:42 pm

Ottawa County farm | Nick Manes

Updated, 7:03 p.m. 8/6/19, to better reflect Zeeland Farm Services’ business operations

Wild swings in weather during this growing season — coupled with wild swings in U.S. trade policy — have Michigan farmers feeling the heat. 

Speaking with reporters before a discussion with agricultural and business leaders in Zeeland on Tuesday, Gov. Gretchen Whitmer expressed her frustration with President Donald Trump’s trade war with China. That war, by most accounts, could have serious negative consequences for states like Michigan that are dependent on agriculture for their economy. 

Gov. Gretchen Whitmer in Zeeland | Nick Manes

“You know, there are things that we can’t control, like the weather, but there are things we can. And when we see trade changes via tweet, it’s really concerning,” Whitmer told reporters before the event held at Zeeland Farm Services, a soybean processor* and agricultural services company. 

“And I know that this has been a tough enough season … for farmers and for agriculture in Michigan, and for all of these China trade changes, I think it could be very devastating,” Whitmer said. “And that’s why I think everything we can do [that] is under our control, we need to be smart about it. And we need to do a heck of a lot better job, and I’m talking about what’s coming out of Washington, D.C., right now.”

Last month, Whitmer signed a $15 million supplemental spending bill to provide loans to Michigan farmers affected by heavy spring rains. 

Whitmer signs farm loan bill after rain has pummeled Michigan crops

On Monday, the Trump administration took the long-threatened step of labeling China a “currency manipulator,” for devaluing its currency as a way of offsetting costs from tariffs.

The designation means the International Monetary Fund (IMF) likely will intensify its monitoring of Chinese currency practices, and it could lead to further retaliation by the Asian economic powerhouse, as Politico reported on Monday. 

China has already said it would suspend its purchase of U.S. agriculture products as part of the escalating trade war. 

Carl Bednarski, president of the Michigan Farm Bureau | Nick Manes

Michigan exported almost $300 million in oilseeds and grains to China in 2017, according to the U.S.-China Business Council. Michigan’s top export to China, auto parts, amounted to $1.2 billion that year, according to the council’s data. 

Carl Bednarski, president of the Michigan Farm Bureau, told reporters on Tuesday that China’s freeze on U.S. agricultural commodities is hitting farmers hard right now. 

“You know, with Michigan having two or three different commodities, they need to go throughout the world,” Bednarski said. “So we really are very concerned about how that’s going to affect agricultural commodities.” 

Trump-China trade tensions bite into Michigan agriculture

For his part, Trump says he’s got American farmers’ backs.

“As they have learned in the last two years, our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do,” Trump wrote on Twitter on Tuesday morning. “And I’ll do it again next year if necessary!”

Whitmer, however, said she is “absolutely” concerned about the pain of the trade tensions.

“The Chinese are the fourth greatest consumer of American soybeans,” Whitmer said. “We grow a lot of soybeans in Michigan, and we’re struggling because of the weather. And so this just exacerbates what I think a lot of farmers are feeling the extreme stress from the natural environment, but now from the political environment, and they deserve better.”

Dems, GOP offer contrast on trade ahead of debates

But for all the tensions and uncertainty over trade, agriculture and business leaders are still paying close attention to issues closer to home. Perhaps the most notable among them is Whitmer’s proposed 45-cent gas tax increase to raise $2.5 billion annually for infrastructure, something she touted at Tuesday’s event. 

Cliff Meeuwsen, president of Zeeland Farm Services, said that increase — which would give Michigan, by far, the highest gas tax in the country — could lead to business owners choosing to fuel up in nearby states, when possible.

Detroit highway traffic | iStockphoto

“I’ve got 100 trucks; they run in four or five states. Do I fill them up on that side of the border or this side of the border?” Meeuwsen asked the governor. 

Whitmer, for her part, sympathized with those concerns, which also included driver safety, particularly pertaining to narrow roads for heavy trucks. She said that her gas tax proposal would help the state pay for better infrastructure, although the plan has, so far, met an ice-cold reception in the GOP-controlled Legislature.

“Is it perfect? Absolutely not. Is it easy? Absolutely not,” Whitmer said. “But it is an honest attempt to solve the problem we’re all paying for.”

Disclosure: This reporter’s partner is employed at Zeeland Farm Services, which hosted Whitmer’s roundtable.

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Nick Manes
Nick Manes

Nick Manes is a former Michigan Advance reporter, covering West Michigan, business and labor, health care and the safety net. He previously spent six years as a reporter at MiBiz covering commercial real estate, economic development and all manner of public policy at the local and state levels.