One down, one to go.
With the signing of the new USMCA trade agreement between the leaders of the United States, Mexico and Canada last week, one of the two largest hurdles facing Nebraska’s economy has been cleared.
In all honesty, little else beyond the name changed between President Donald Trump’s USMCA and the North American Free Trade Agreement he disparaged. But this isn’t time to worry about semantics – Nebraska’s agricultural and manufacturing industries needed market access to sell their goods to two largest international trading partners, our nation’s northern and southern neighbors.
Now, it’s time to tackle the other – tariffs.
Unfortunately, the agreed-upon framework of the pact allows for the U.S. to institute its “national security” tariffs on steel and aluminum. In response, allies turned to and continue to enforce retaliatory tariffs to punish the White House for its misguided, destructive choices.
As a result, Nebraskans lost. Big time.
A report from the Nebraska Farm Bureau found that tariffs instituted as a result of Trump’s actions directly cost Nebraska farmers and ranchers between $700 million and $1 billion in farm income. That’s before considering the $164 million to $242 million in labor income that stemmed from the loss of between 4,100 and 6,000 jobs.
For more than two years, Journal Star editorials have stressed the need for trade policy that will help those in Nebraska’s largest industry. Farmers and ranchers have already endured incomes halved within the decade, low commodity prices and ever-escalating property taxes.
Until recently, Trump -- who this week proclaimed himself "Tariffman" -- had failed to come through in any meaningful way, only exacerbating the pain felt in the ag economy. The trade deal will undoubtedly help to alleviate some pain, but permitting tariffs to continue allows governments to choose winners and losers – with ag producers still among the latter.
Nebraskans know what dangers tariffs pose to their economy, with Republicans such as Rep. Adrian Smith and Sen. Ben Sasse serving as vocal critics of such backward trade policy. They understand free markets promote innovation and prosperity. The rising tide of both lifts all boats in the end, even if thought it may churn up rough waters in certain fields for a time.
Tariffs, meanwhile, are essentially taxes that raise the price of goods for businesses and consumers. Customers in countries where American farm commodities were subject to tariffs unsurprisingly turned to buy products from suppliers in nations with lower barriers – which, as the Farm Bureau report demonstrated, had devastating consequences for Nebraska.
To paraphrase Bon Jovi, we’re halfway there – but Nebraska’s ag producers don’t want to be living on a prayer. They need the certainty provided by the USMCA trade deal extended removing the tariffs that have already cost them so much and will continue to do so until they’re rescinded.