Rep. Cindy Axne explains what the trade deals mean for her district.
Iowa Rep. Cindy Axne has been pressing Congress to finalize the U.S. Mexico Canada Agreement for several months, and she’s been among the most vocal critics of the trade dispute between Trump and China that’s resulted in a series of escalating retaliatory tariffs.
The House approved an agreement to replace the North American Free Trade Agreement with the USMCA in December, and President Donald Trump signed it into law this week.
Mexico and Canada are the United States’ largest trading partners and Iowa’s top two export markets. Considering just agricultural exports, Iowa is consistently among the top exporting states. For many commodities, including soybeans, pork and corn, the Hawkeye state is second-to-none.
In a statement, Axne said the USMCA “would provide certainty for farmers and producers by ending the threat of back and forth retaliatory tariffs that this administration has pursued.”
She also said enhanced labor protections that House Democrats added to the agreement was “good news” for Iowans. “If we didn’t work so hard to get this right, we would continue to see Iowa workers undermined,” Axne said.
It’s not over yet, though. The pact won’t be fully operational until 90 days after the last country, most likely Canada, ratifies the deal. While the Canadian government has initiated the ratification process, it could take several more months to finish.
There’s seemingly encouraging news on the China front as well. In January, the White House announced that the U.S. and China signed a “phase one” trade deal. It stops short of the comprehensive reform Trump promised, but the bright spot for farmers is that China agreed to double its agricultural purchase to $40 billion.
But there’s a catch, Axne said in an interview with AgriTalk, a national radio show. “There’s a lot of concern by economists and ag groups that it’s going to be difficult for China to reach the levels in Ag purchases.”
She’s not alone in that skepticism. Deborah Elms, executive director of the Asian Trade Centre, told CNBC she spots a “giant red flag” in the agreement.
That’s because despite the promise, “if the market doesn’t support the purchases at that level, then we may not reach that target,” Elms said.
Axne represents Iowa’s 3rd district, which encompasses 16 counties in the southwest corner of the state. For farmers especially, it’s been a tough few years as they’ve weathered changing climate conditions, the fallout from Trump’s trade wars, and EPA’s undermining of renewable fuel standards. Taken together, these events have pinched, and in some cases shut down, agricultural businesses across the state.
“We’ve lost 25 percent of our soybean market, our corn prices are at an all-time low, every factor of agriculture upstream and downstream has been impacted by this,” Axne said in an earlier interview with Courier. In 2018, the White House rolled out a trade aid package to compensate farmers hurt by the trade war. Direct payments are likely to exceed $30 billion this year, nearly twice the cost of the 2009 auto-industry bailout.