The U.S. dairy industry Wednesday endorsed bipartisan,
bicameral legislation to reform a powerful White House trade tool to ensure it
is used as intended by Congress to respond to genuine national security
threats. Rolling back current retaliatory tariffs and keeping others from forming
in the future is the dairy industry's top trade priority. America currently
sends 16 percent of its dairy production overseas, and industry officials see a
lot of room for expansion in the future.
The Trade Security Reform Act, sponsored by Reps. Ron Kind
(D-WI) and Jackie Walorski (R-IN), and Sens. Rob Portman (R-OH) and Doug Jones
(D-AL), aims to change the process by which the Administration imposes Section
232 tariffs. The Portman-Jones and Kind-Walorski bills tighten Section 232
rules to ensure it is only used for true national security purposes while
taking into consideration a number of economic and security concerns. To do so,
the legislation instructs the Department of Defense to investigate possible
threats, and, when a legitimate threat is identified, asks the Department of
Commerce to develop recommendations to respond. It also enhances the role
Congress plays in the Section 232 process.
Section 232 was created by Congress to combat trade issues
that pose a national security threat. In recent years, this process has been
used to levy duties on imports of steel and aluminum from Mexico and other
countries. In response, Mexico imposed retaliatory tariffs on a range of U.S.
goods, including cheese. Those retaliatory tariffs have been a heavy weight on
U.S. cheese exports to our largest export market. An economic study released by
Informa Agribusiness Consulting estimates lost dairy exports of $1.1 billion
over five years unless those tariffs are dropped. To date, the U.S. government
has refused to remove the steel and aluminum tariffs and as such, Mexico has
maintained its retaliatory tariffs.
"Dairy prices have steadily fallen since Mexico imposed
its tariffs, harming farmers," said Jim Mulhern, president and CEO of the
National Milk Producers Federation. "Exports to our most important market
are being threatened, hurting dairy businesses and the thousands of Americans
they employ."
"Agriculture is being hurt by retaliatory tariffs; the
bill's sponsors should be applauded for finding a common-sense process to a
complex issue," said Tom Vilsack, chairman and CEO of the U.S. Dairy
Export Council. "It protects one of the president's tools to combat
threats to our national security while allowing for the full consideration of
true safety and economic factors at play."