ND farmer: 'Only spanking ourselves' with tariffs

CRYSTAL, N.D. -- Brian O'Toole ticks off the 10 Southeast Asian and Latin American countries he's visited, some more than once, to promote U.S. wheat exports.

Brian O'Toole in 2016 served as chairman for U.S. Wheat Associates. This photo was taken July 18, 2016, during the summer national board meeting in Fargo, N.D. (Nick Nelson/Agweek)

CRYSTAL, N.D. - Brian O'Toole ticks off the 10 Southeast Asian and Latin American countries he's visited, some more than once, to promote U.S. wheat exports.

O'Toole formerly served as chairman of U.S. Wheat Associates, which develops markets for U.S. wheat around the world, and farms in Crystal, N.D. The trips have given O'Toole personal, front-line experience with foreign customers.

And in his judgment, the Trump administration's current get-tough-on-trading-partners approach risks alienating foreign buyers with whom O'Toole and other agriculturalists have worked long and hard to win sales.

"Do you really think these countries will come back to us (to buy U.S. ag products) with open arms?" he says. "We're not spanking China with these tariffs. We're not spanking any of these countries. We're only spanking ourselves."

Lost U.S. soybean sales to China inevitably work against prices of U.S. wheat, roughly half of which is exported, he says.


U.S. wheat farmers already have lost market share in Mexico, the top importer of U.S. wheat. Russia, which has become the world's leading wheat exporter, has picked up many of the sales that once went to the United States, O'Toole says.

When the effect of Trump administration trade policies on U.S. ag exports is criticized, Trump supporters often counter with two arguments:

• That the policies will force other countries to change their unfair trading practices.

• That ag exports lost by the U.S. in some markets will be offset by increased exports to other markets. An example: Increased Russian grain exports to Mexico means less Russian grain for customers in other markets, creating new opportunities for the U.S. to sell its wheat elsewhere.

O'Toole said those arguments aren't valid, especially not for wheat.

Disputes over trade practices should be handled by the World Trade Organization, not through tariffs and counter-tariffs of individual countries, he says.

The World Trade Organization, commonly known as the WTO, is the only global international organization dealing with the rules of trade between nations. Its goal is helping producers, exporters and importers conduct their business and resolve disputes.

The idea that lost U.S. wheat sales in one market will be adequately replaced by additional sales in another market doesn't hold up, O'Toole says.


The quality of U.S. wheat is exceptionally high, and some foreign buyers will pay extra for it. As a result, the U.S. wheat industry has naturally focused its export efforts on foreign markets willing and able to pay a premium, O'Toole says.

In contrast, some wheat-exporting countries focus on markets where low price, not high quality, is customers' primary concern and where customers won't pay a premium, he says.

American farmers lose if they replace reduced higher-paying sales of U.S. wheat in foreign markets that value quality with increased lower-paying sales of U.S. wheat in markets that don't, he says.

Foreign customers, especially ones who favor quality over price, value stability and reliability in their trading partners. That's threatened by the ongoing round of tariffs and counter-tariffs, O'Toole says.

"We don't want to lose the commitment, the trust," he says.

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