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NTU Comments on "The Danger China Poses to American Agriculture" Hearing

 

 

Statement of Bryan Riley

Director, Free Trade Initiative

National Taxpayers Union

United States House of Representatives, Committee on Agriculture

“The Danger China Poses to American Agriculture”

March 20, 2024

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National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, appreciates the opportunity to submit the following comments regarding your March 20 hearing, “The Danger China Poses to American Agriculture.”

NTU was founded in 1969 to be the “Voice of America’s Taxpayers.” For decades, we have worked with Members of both parties over the years to shape and enact multiple iterations of federal tax reform, strengthen taxpayer rights and due process, oversee the Internal Revenue Service, promote and protect the economic gains from free trade, remove red tape from America’s bureaucratic health care system, and help build an economy and federal budget that works for all the nation’s taxpayers. NTU urges the committee to consider the following two recommendations:

1. Protect farmers against the threat of a new or expanded trade war.

2. Guard against legislation that would unnecessarily weaken farmers’ property rights.

The greatest danger China poses to American agriculture is that the country will stop buying U.S. farm exports.

China is the largest export market for U.S. agricultural products, purchasing nearly one-fifth of our agriculture and livestock exports in 2023. If China were to reduce or eliminate purchases of U.S. agricultural products, $23.9 billion in farm income would be at risk. To put this in perspective, USDA forecasts that net farm income in 2024 will be $116.1 billion.

Since 2000, just before China joined the World Trade Organization, exports of agriculture and livestock products to China increased by an astounding 1,680 percent. The only significant interruption in that growth occurred from 2016 to 2018, as agriculture and livestock exports to China plunged by 52 percent following China’s retaliation against U.S. tariff increases.

The biggest China-related risk facing U.S. agriculture is a replay of that scenario. President Trump has proposed tariffs of 60 percent or higher on imports from China. Some legislators have proposed revoking “normal” trade status for China, which would result in even bigger tariff increases than those imposed under the Trump administration.

To address such risks, NTU urges Congress to enact protections against the imposition of tariffs by the executive branch without securing congressional approval.

Congress should also reject broad-based tax increases imposed on Americans who import goods from China. In addition to the direct cost to taxpayers, the likely retaliation by China would be devastating to American farmers and livestock producers.

Congress should protect farmers’ property rights.

While the most important action the Agriculture Committee can take to protect farmers is to help prevent a new trade war, it should also guard against threats to farmers’ property rights, including legislation that would ban farmers from selling their land to foreign interests in cases where there is no evidence of a national security threat. 

Targeted options have been proposed that would guard against risks from foreign adversaries without unduly depriving farmers of their property rights. For example, the U.S. Government Accountability Office has suggested several ways the government can improve data on foreign land ownership and identify national security risks. Legislation to adopt such reforms has been introduced in the Senate.

Private property rights are the backbone of the U.S. economy. As opposed to countries like communist China, if you own a farm in Montana, that is your farm. It is not “our” farm. If you own a feedlot in Nebraska, that is your feedlot. It is not “our” feedlot. Subject to legitimate, clearly specified exceptions, what you do on your private property—including if you decide to sell it, and who you want to sell it to—should be up to you. The alternative is to risk becoming more like China and other socialist countries.

While some in Congress have proposed bills to address this topic, these efforts are largely symbolic, with China owning just 0.03 percent of American farmland. Nonetheless, it is important for Congress to guard against any further weakening of Americans’ property rights in the future.

NTU commends the committee for addressing these threats to American agriculture and appreciates your consideration of these recommendations.