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We’ll find out who Trump needs more: farmers or steelworkers

We may soon learn who President Trump loves more — steelers or farmers.

The report from the Department of Commerce investigating the impact of steel imports on U.S. national security (Section 232) has landed at the White House.

{mosads}Its recommendations are not yet public, but since the probe was launched last April, the domestic steel industry has been pushing for actions to safeguard the sector from illegal imports, while the nation’s farmers have expressed concerns about trade retaliation against U.S. agricultural exports and the availability of immigrant labor.

 

Early last week, farmers and the U.S. agricultural industry appeared to have the inside track in winning over Trump.

The timing of a series events might be quite telling:

Could Zippy and other farmers have had Trump’s ear — at least for the moment — reminding him how important immigrant labor is to the nation’s agricultural sector?

The American Farm Bureau supports reform that provides access to a legal and stable agricultural workforce in the short- and long-term.

According to a policy statement, the AFBF wants a new market-based visa program created that is available to both seasonal and year-round farmers, and that “provides flexibility for employers and workers by allowing contract and at-will employment options, and an adjustment of status for experienced, but unauthorized, agricultural workers.”

A sustainable farming workforce is critical — even more so as the nation’s unemployment drops. In addition, the dairy industry is also supporting the push for legislation that would permit foreign workers to be employed on American farms all year round.

Currently, agricultural visas are granted on the basis of seasonal crop work (harvest time), but the needs of dairy and livestock farmers are overlooked.

A 2015 report backed by the National Milk Producers Federation, noted that 33 percent of all U.S. dairy farms employ foreign-born workers, and that those farms produce nearly 80 percent the nation’s milk. Wisconsin is major dairy country, a pivotal state Trump carried in the election by a mere 27,257 votes.

If all immigrant labor disappeared, according to the same report, nearly 17 percent of U.S. dairy farms would go out of business, slashing U.S. GDP by $32.1 billion and eliminating 208,000 jobs nationwide. Retail milk prices would increase 90 percent if all immigrant labor was lost — elevating the supermarket price of a gallon to approximately $6.40.

The president said Tuesday that he would sign a “bill of love” to extend protections to 800,000 immigrants who entered the U.S. illegally as children — if Congress can agree on the fine points. If that happens — a big if — it will appease the farmers to some extent.

But if Trump decides to impose tariffs or quotas on imported steel, that might be a show of greater affection for the steel industry. Such a show of greater affection for the domestic steel industry, however, could ignite a retaliatory trade war against farm exports, as has happened in the past and has been threatened again.

The Department of Commerce said it would “publish a summary of the report in the Federal Register and make the report available to the public after removing any business confidential or classified material,” after the president’s decision is announced.

According to S&P Global Platts reporting, the bet is that there will not be broad-based, sweepingly harsh import restrictions on all steel products from all countries. Instead, expect surgical strikes.

In the end, Trump will likely deal a little bit to the farms, and a little bit to the mills. After all, you can’t turn off a cow, and you don’t want to idle any more furnaces.

Joe Innace is the content director of Metals/Americas for S&P Global Platts. He’s also an award-winning business writer, recognized as Steel Journalist of 2015 by the World Steel Association.