Agriculture, Trump facing trade war?Agriculture, Trump facing trade war?
Could there be a trade war shaping up between international firms operating within the U.S. and Donald Trump, President of the United States?
February 7, 2017
Could there be a trade war shaping up between international firms operating within the U.S. and Donald Trump, President of the United States? A trade war of insults, including a tweet storm of threats from Trump seems imminent.
Last Friday, David MacLennan, the chief executive officer of Cargill Inc., the largest closely held American company, warned of serious economic and social dangers posed by Trump’s recently announced curbs to legal immigration. Not said but implicit in any such statement made by an executive of every firm with close ties to agriculture was the dangers of sealing our southern border, cutting off the grey market of campesinos, those seasonal farm workers who cross the border to harvest much of our fruits and vegetables.
In his comments published by the Huffington Post, MacLennan said, ”The current climate has many of our smartest people from outside the U.S. questioning whether they want to stay here. We don’t want to drive away talented people and their innovative thinking. It would weaken not only our food system, but the U.S. economy.”
Other top executives have questioned the wisdom of closing our borders or severely limiting immigration. Tim Cook, Apple’s CEO, emailed his employees the day after Trump’s attempt to alter the rules.
“In my conversations with officials here in Washington this week,” he wrote, “I've made it clear that Apple believes deeply in the importance of immigration -- both to our company and to our nation's future. Apple would not exist without immigration, let alone thrive and innovate the way we do.”
Agreeing with Cook, were C-level execs who head up most of the major American corporations who do business overseas.
Ag businesses, in particular, were expressing some level of concern ranging from cautious to outrage. One editorialized that President Trump’s new get-tough attitude on immigration has already stopped one Mexican from coming to the United States. “Trouble is, he said, “the Mexican who stayed home was president Enrique Pena Nieto.”
Doing a hob-nailed boot shod tap dance on the toes of American ag trading companies, Trump had already signed an executive order removing the U.S. from the Trans-Pacific Partnership and wants to renegotiate the North American Free Trade Agreement. MacLennan, aware of the damage that a late night Trump tweet can cause, said Cargill is eager to improve NAFTA but “not dismantle it.”
Disruptions in the mostly free flow of international agricultural trade will harm Cargill, Archer-Daniels-Midland, Bunge Ltd. and Louis Dreyfus, the four biggies in the business.
Referring to the slowdown in immigration and the pull back from trade agreements that Trump wants, MacLennan said,”We cannot wall ourselves off from the 96% of the global population that lives outside the U.S. We’ve seen what happens when protectionism disrupts the free flow of food. It can provoke famine, cause conflict and even war.”
Like a good friend told me in 2007 when economic conditions caused a spike in the price of corn, and the cost of tortillas, the staple food of Mexico, skyrocketed. “Tortilla riots” ensued.
“A man can endure almost anything,” he said, “but if you tell him he can’t feed his children, he will take to the streets.”
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