Santaquin fruit grower Ray Rowley worries that any profits he might have sought on his ripening apple crop will be lost to a trade war brought on by President Donald Trump’s approach to tariffs.
As the operator of Cherry Hill Farms with his five siblings, Rowley is not a huge foreign exporter. But with harvest and sale of those apples just two weeks away, he fears that tons of competing produce meant for overseas consumers will now flood domestic markets instead due to trade barriers, pushing price margins to a breaking point.
“I’m worried about the next generation,” Rowley, joined by his 18-year-old daughter Emily, said Friday. “They want to continue, but if these young adults are going to have the same chance to farm that we had, we’ve got to solve some of these problems.”
While voicing support for Trump’s broader political agenda, some of the state’s top political leaders and industry advocates are now rallying around Utah growers like Rowley and other exporters, warning of a host of complex and unforeseen economic impacts as new tariffs take effect and targeted countries react in kind.
Already reeling from four years of sagging commodity prices, Utah farmers have a lot at stake in the prospect of tariffs on products worth nearly $660 billion in yearly U.S. trade. About $1.1 billion of the Utah’s $11.6 billion in foreign exports in 2017 came from its farming sector, ranging from prepared foods and ingredients, fodder, beef and dairy to fruits, vegetables and juices.
In separate home state appearances last week, Utah Sen. Orrin Hatch and Rep. Mia Love both broke with Trump’s policy on tariffs against rivals and allies alike, joining crowds of receptive famers, other exporters and business leaders. Many at the two events also called for swift renegotiation of trade pacts such as the North American Free Trade Agreement, or NAFTA, and reopening of talks on the Trans Pacific Partnership.
'More trade, not less’
Trump officials are playing down the longterm effects of tariffs, imposed in part for leverage both in bringing trade partners into new negotiations and for other foreign policy goals. But Hatch and Love both said they have personally challenged the president over elements of his emerging global trade strategy.
In talks with top Trump trade advisors Larry Kudlow and Peter Navarro, Love said she had “strongly conveyed” her problems with tariffs imposed for national security reasons and their impact, in particular, on exports to China. Retaliatory Chinese tariffs now threaten more than $60 million in Utah exports, falling heaviest on farm products along with aluminum recycling and plastics manufacturing.
“I’m concerned that I’m not getting the strategy or a clear indication of what’s going to happen in the end by the administration,” Love said at a rally with farmers at the Utah Capitol. “And that’s really frustrating.”
She and Hatch both said as the potential for trade sanctions expands from China to traditional allies, such as Japan, Mexico, Canada, the European Union and other U.S. partners, they are bringing economic instability to Utah’s food producers, manufacturers and technology companies.
“More trade, not less, benefits Utahns and the American people,” Hatch told a downtown Salt Lake City gathering backed by Salt Lake Chamber and World Trade Center Utah. “Meanwhile, protectionism not only corrodes our economy but our global and moral stance as well.
“For the American economy to compete and lead,” Utah’s senior senator said, “our nation must embrace trade policies that are free, fair and open.”
Hatch said that in addition to farm and tech sectors, he was concerned about the prospect of new tariffs on the auto industry.
“Such tariffs would not just hit Utah car dealerships and auto part businesses, but would hurt Utah consumers, the U.S. economy and our international alliances as well,” he said.
“I’ve told the president this myself,” Hatch said. "It isn’t something he doesn’t understand.”
Love told farmers and agricultural lobbyists on Friday that the immediate impact of U.S. tariffs and a wave of retaliatory actions could put many struggling operations out of business. That, in turn, could make the U.S. reliant on overseas producers, she said.
“The last thing we want to be dependent on other countries for is food,” Love said.
The congresswoman also criticized a Trump proposal for spending $12 billion in relief for U.S. farmers affected by the tariffs. “Our country should not be in the business of creating barriers or problems, and then proposing $12 billion to get over those barriers," she said. “We should instead be removing obstacles.”
Utah businesses have made dramatic strides in expanding overseas export markets over the past decade or more, even managing to grow those trade volumes in the depth of the Great Recession. And the largest share of that export expansion has centered on smaller employers in Utah, officials said.
Those successes have earned the state a hard-won reputation in foreign trade circles, according to Derek Miller, CEO of the Salt Lake Chamber. Thousands of small and medium-sized Utah businesses hope to keep that momentum, Miller said, “but they cannot do it alone.”
“They need free markets,” he said. “They need fair trading practices. And they need the stability and predictability that comes from strong trade agreements.”
In an earlier interview, Miller said Utah’s homebuilders were already seeing price hikes in construction materials such as steel and lumber due to tariffs, raising building costs in the state just as it faces a severe housing shortage and rapidly rising home prices.
Top U.S. economists had projected that the Trump tariff regime would begin affecting U.S consumer prices within six months to a year. But an official with Farmers for Free Trade, a nonprofit group campaigning for expanding export markets, said U.S. growers are already seeing markets harmed.
Export contracts are being canceled, in some cases, even with shipments on their way, said Brian Kuehl, the group’s executive director. Dairy farmers have already gone out of business due to the trade war “because they were right on the line,” he said. Others are having to dismantle longstanding supply chains and invent others.
“This is not hypothetical. This is not esoteric," Kuehl said. “This is about real farmers and real families.”
Ron Gibson, president of Utah Farm Bureau, called the situation for the group’s 100,000 Utah members and families “extremely stressful and extremely challenging.” Himself a dairy operator, Gibson described a recent conversation with a neighboring farmer worried about the survival of his business.
“You could see the fear in his eyes,” he said. “This is a serious situation.”
Gibson invoked the president’s main slogan as he urged Trump not to overlook farmers as the administration pursues its economic agenda.
“If we are to make America great again, we must have agriculture great again,” Gibson said. “We will never have a strong U.S. economy if we don’t have strong agriculture.”