Mississippi River Mayors Sound Tariff Alarm

BY DAVID MURRAY
April 16, 2018


As the war of words and actions over tariffs heats up between the U.S. and China, mayors of Mississippi River towns are warning of potentially severe impacts to river commerce.

In a statement released April 4, the Mississippi River Cities & Towns Initiative (MRCTI), an advocacy group, said river ports could feel the effects. The statement was released the same day that China responded to the Trump administration’s tariffs on a list of Chinese goods by releasing its own list of 104 U.S. products on which it proposes to impose retaliatory tariffs, including soybeans.

“Half of the top 10 soy-producing states in the US are along the Mississippi River with Illinois, Iowa, Minnesota, Missouri and Arkansas ranking as 1, 2, 3, 6, and 10. Agriculture is the third largest [economic sector] on the Mississippi River, generating $33 billion in annual revenue directly supporting 192,000 jobs just in the Mississippi River Valley alone.”

Family farms account for 90 percent of all U.S. farms, and the U.S. is the largest producer and exporter of soybeans in the world, accounting for a significant share of farm revenue, the MRCTI said. This makes the implementation of tariffs from the nation’s top soybean purchaser “particularly worrisome,” the statement said.

Frank Klipsch, mayor of Davenport, Iowa and co-chair of MRCTI, said, “My state ranks second in U.S. soybean production. If China implements a tariff on soybeans, then the over $14 billion in soybean exports enjoyed by the U.S. will take a hit and my state may feel that pain acutely.”

“Arkansas is the largest soybean-producing state in the Lower Mississippi River Valley with the most production adjacent to the waterway,” said Jay Hollowell, mayor of Helena-West Helena, Ark. “Over 20,000 jobs in my region are dependent on the soybean industry. Some of our farms export 100 percent of their soybeans. I think we need to be extremely careful in implementing these tariffs and take a hard look at how this could potentially hurt people.”

“In terms of production value, soybeans are the top row crop in my state of Mississippi, and our region along the river had some of the highest concentrations of production. Soybeans brought in over $1 billion in revenue to Mississippi in 2017,” said Errick Simmons, mayor of Greenville, Miss.

Lionel Johnson, mayor of St. Gabriel, La., and co-chair of MRCTI, said, “My city resides just south of Baton Rouge where the port of southern Louisiana begins. Twenty percent of all U.S. imports and exports pass through Louisiana ports. Thirty-two percent of the cargo transported on the Lower Mississippi River is agricultural product. These tariffs can have ripple effects into the economy that we need to recognize could potentially hurt ports from St. Louis to Memphis to New Orleans.”

The tariff wars began when President Donald Trump announced targeted tariffs against imported steel and aluminum on grounds of national security—25 percent for steel and 10 percent for aluminum. Initially, they targeted all countries that exported those metals, but exemptions were soon offered to trade allies Canada, Mexico, the European Union, Australia, South Korea, Brazil and Argentina until May 1. Some of those exemptions were accompanied by renegotiations of trade deals deemed unfavorable to the U.S. by the Trump administration.

“We were watching these tariffs very closely, as the steel and aluminum tariffs had varying impacts. But now we’re in a territory that directly implicates our bread and butter,” said Colin Wellenkamp, executive director of MRCTI.

China’s initial response was a series of limited tariffs on a token $1 billion worth of products like pork, wine and blue jeans.

On April 3, the Office of the United States Trade Representative released a further list of more than 1,300 Chinese products it threatened to hit with a 25 percent tariff amounting to about $50 billion. China then responded with its own upgraded list. While the metals tariffs have taken effect, those additional tariffs have not yet been enacted, and could be forestalled if China makes concessions on its trade practices. The fast-moving news of tariff threats has sent various markets see-sawing.