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Greater North Dakota Chamber panelists see 'crossroads,' some opportunities in trade war

BISMARCK — Panelists for a Greater North Dakota Chamber Policy Summit discussion of tariffs on Tuesday, Sept. 10, lamented the effects of the escalating U.S.-China trade war but see some opportunities.

"We're at a crossroads as far as trade is concerned in the United States," said panelist Thomas Shorma, CEO and president of WCCO Belting Inc., of Wahpeton. "North Dakota's very dependent on agriculture and exporting, both. The trade war with China is having a devastating impact on ag, not just in North Dakota, but across the country, and certainly it's impacting the exports."

His company, which manufactures specialized rubber products, has faced mounting tariffs on fabrics imported from China, growing from $250,000 a year to $1.5 million as of March.

WCCO generates more than half its total revenue from customers outside the U.S., Shorma said. A U.S. duty drawback program refunds him for full duties when he exports his finished products, but not for sales in the U.S., Canada or Mexico.

That creates a trade "imbalance," he said, for the same products he must sell for higher prices in the U.S. than into Russia, Australia or Europe. Several areas of imbalance, from agriculture to automobiles, have resulted from the trade war, Shorma said.

"Look at history. Trade wars have never worked. Everybody loses," said panelist Bob Sinner, president of SB&B Foods near Casselton, who prefers free trade agreements and working with allies to resolve issues. Shorma sees free trade agreements as effective for "leveling the playing field" in trade practices perceived as unfair.

Sinner said soybeans are "in the crosshairs" in the trade war as the U.S. industry looks for new markets "to help clear the pile." India could be a potential market, he said, citing a large vegan culture there. Soy is a cheap protein source.

Still, he lamented the current state of affairs resulting from the ongoing China dispute.

"I've never been an advocate or felt that a trade war was the way to negotiate," Sinner said.

Panelist Kristin Hedger, vice president of Killdeer Mountain Manufacturing, which produces airplane parts, sees the Export-Import Bank of the U.S. as a "very good tool" but overlooked. The bank facilitates exports of U.S. goods and helps provide financing for global competition.

"I think from a trade and tariff standpoint, from the aerospace perspective, empowering the Export-Import Bank I think is something that is very, very beneficial," Hedger said. Shorma praised the bank's insurance on foreign payment for U.S.-exported goods.

Policy Summit attendees also heard via video from members of North Dakota's congressional delegation, each of whom expressed optimism for the U.S.-Mexico-Canada Agreement, a free trade agreement between the countries that is signed but not yet ratified by Congress.

Gov. Doug Burgum on Tuesday also called for Congress to ratify the agreement.