Since taking office, Donald Trump has been signing executive orders at a clip, upholding campaign promises that once seemed far-fetched—like taking action to build a wall on the Mexican border—and moving to unravel Obama signature policies like the Affordable Care Act with the stroke of the pen.
In one expected but nevertheless highly controversial action, Trump has withdrawn the United States from the Trans-Pacific Partnership. The 12-nation trade agreement would have been a sort of NAFTA for the Pacific Rim, expediting trade between its member countries and helping buffer against Chinese economic hegemony and influence in the region. Proponents of the TPP saw it as a policy that would open up new markets for American goods, while its detractors thought it would export American jobs to cheaper foreign labor.
One group that has been solely disappointed by the TPP's unraveling, though, is America's farming industry, which had lobbied hard for its passage. Under the TPP's terms, America's farmers would have had tariff-free access to fast-growing markets. The American Farm Bureau Foundation estimated that the annual net farm income in the US would have risen by $4.4 billion under the TPP and that the pact would have created 40,100 agriculture jobs in the US.
That would have come as great news to a US farm industry that has seen falling income and crop prices over recent years. And while much of the farm industry supported Trump's candidacy, they were hoping for a different outcome when it came to the TPP. For them, it's a lost opportunity, and other countries—most concerningly, China—will likely move forward in cementing preferred-access trade relationships in America's absence.
"Trade is something soybean farmers take very seriously. We export more than half the soy we grow here in the United States," Ron Moore, president of the American Soybean Association said in a press release expressing concern after the withdrawal from the TPP. "The TPP held great promise for us, and has been a key priority for several years now. We're very disappointed to see the withdrawal today."
While agricultural groups vocally lamented the news, they aren't throwing in the towel and hope the new administration will set up trading relationships to protect American farm interests abroad.
"It is critical that the new administration begin work immediately to do all it can to develop new markets for US agricultural goods and to protect and advance US agricultural interests in the critical Asia-Pacific region," Zippy Duvall, president of the American Farm Bureau Federation, said in a statement.
The TPP wouldn't have just opened the doors to new markets. Also in the agreement were hard-fought agreements regarding labeling and more propositions that could have reshaped global trading regulations.
"The net export increases for the US would have been modest, but what we are also losing in the now-defunct agreement is the ability to shape trade rules for the region," a representative of the National Milk Producers Federation told MUNCHIES. "That's a harder figure to quantity, but just as important for setting the future terms of trade in the Pacific sector."
Among those rules were statutes concerning geographical indication labels that would have helped level the playing field for US producers to compete with European exporters, who often insist on respecting geographical indication laws in their own trade agreements.
For farmers, there are more dark clouds on the horizon. Also potentially on the cutting board is NAFTA, which could also cost farmers dearly. Trump has said he will renegotiate the North American trade partnership amidst rising tensions with Mexico, and on Thursday it was revealed that he has proposed taxing all Mexican imports at a 20 percent rate to pay for the border wall.
Mexico is currently the US's third-biggest agricultural export market, bringing $17.7 billion worth of American food into its borders each year. It is the dairy industry's single biggest export market, accounting for $1.2 billion in 2016, and it also consumes $1.3 billion in US pork each year. (For our part, in 2015 the US imported $21 billion in agricultural products, making it our second-largest supplier of agricultural products. If NAFTA falls apart, prepare to pay dearly for avocados.)
The National Milk Producers Federation estimates that if access to the market is severely restricted, it could cost dairy producers as much as $1 billion in the first year and ultimately lead to a decline in dairy production.
"The North American Free Trade Agreement (NAFTA) has opened a major door to Mexico that we don't want slammed shut," Jim Mulhern, president and CEO of the National Milk Producers Federation said in a press release.
The dismay is coming from virtually all of the farmers that constitute America's breadbasket. The National Cattlemen's Beef Association points out that 96 percent of the world's consumers live outside of the United States, and opening lines of trade is clearly good for business.
"TPP and NAFTA have long been convenient political punching bags, but the reality is that foreign trade has been one of the greatest success stories in the long history of the US beef industry," Tracy Brunner, president of the National Cattlemen's Beef Association said in a statement expressing worry about Trump's trade actions. "Fact is American cattle producers are already losing out on $400,000 in sales every day because we don't have TPP, and since NAFTA was implemented, exports of American-produced beef to Mexico have grown by more than 750 percent."
With the future of NAFTA uncertain, it looks like farmers will have to hope Trump comes through with the bilateral trade agreements he touted on Tuesday. If not, some of Trump's most ardent supporters during the election could be left empty-handed as he cements trade deals that will help define the course of his presidency.
Trump touted an "America First" policy that seeks to bring foreign jobs to US soil, but the protectionist policy won't help American farmers, the world's most efficient, who are eager to send their produce around the globe.