Anxiety, uncertainty and perplexity: the mood in Washington this week

Is he actually going to do these things?

Does he even understand them?

Will we get anything done?

Those questions seemed to be swirling around the Washington, D.C. agriculture and trade policy community this week as I and a group of agricultural journalists met with congressmen and farm policy experts in the U.S. capital. Anxiety, uncertainty and perplexity about the new administration emanated from left, right and centre as President Donald Trump’s first 100 days wound down with huge questions remaining.

Is Trump going to pull the U.S. out of NAFTA? How the heck can anybody know when in the course of 24 hours Wednesday-Thursday he seemed to simply want to reform some parts of the comprehensive agreement, then seemed to be pondering scrapping the deal entirely, then going back to just wanting to “fix” parts he is unhappy with.

That’s the kind of uncertainty I sensed politicians and ag leaders grappling with on Monday and Tuesday, as they coped with a mercurial new president and administration that doesn’t even have many of its key staff in place. Indeed, Monday evening we sat in the Senate press gallery to watch the confirmation speeches and vote for Trump’s Agriculture Secretary nominee, Sonny Perdue. He was confirmed 87-11-1, but finally gets to his office at United States Department of Agriculture weeks later than anybody expected, and he’ll walk into a department already threatened with billions of dollars in cuts and facing thousands of layoffs recommended in Trump’s proposed budget. Does Trump understand what a 21 percent cut would do to U.S. farm programs, or is he just playing with ill-considered notions he’ll abandon once strong, informed characters like Perdue are in place to clue him in? Nobody knows.

The NAFTA storm-in-a-teacup this week is similar. Trump’s nominee for U.S. Trade Representative, Robert Lighthizer, is still weeks away from being confirmed by the Senate, yet Trump makes bold and shocking trade statements and even actions. Trump ditched the years-long process of the Trans Pacific Partnership within days of assuming power in January, outraging and upsetting huge sections of the export-reliant U.S. agriculture and farm sectors. Last week he picked a very public fight with Canada over changes in Canadian dairy pricing regulations that closed a loophole that some American processors had been exploiting. Trump has continually provoked Mexico with threats to NAFTA and insults to its people, causing that neighbour and trading partner to seek friends elsewhere. He has done this all without having an Agriculture Secretary in place and having nobody in charge of the U.S. Trade Representative’s office.

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Some Democrats support Trump’s protectionist slant. Many Republicans oppose it. But what will Trump actually do? That’s something nobody showed any certainty about.

Beyond these trade issues, which are getting most of the headlines (and were most interesting to me as a Canadian) is a much more profound issue for American farmers and agriculture: formulating the next Farm Bill. That gigantic piece of legislation is the enabling law that funds hundreds of billions of dollars in spending for U.S. farm programs and food stamps. It is epically complex and byzantine in its wording, making its formulation and approval an exhausting, high-stakes, daunting process for agriculture committees in both House and Senate in a “normal” period. But this period is far from normal, even by tempestuous Washington standards. Both Republican and Democratic leaders of the committees told us that they were hopeful they could work together as they had in the past to get the next Farm Bill done before the present bill expires, but their confidence seemed to me a touch aspirational as opposed to being sincerely held. As much as ag leaders in House and Senate might plan to work together, the divisiveness today was evident Monday at Perdue’s confirmation vote. Perdue is only the second agriculture secretary nominee in history to fail to win a unanimous vote, and the first since 1986 to face opposition. Partisan rancour and bitterness is already evident in Congress, and then there’s the issue of relations between Congress and Trump when any Farm Bill goes forward.

So it’s a time of anxiety and uncertainty in Washington, with few expressing much confidence that they can see the direction the Trump administration will truly end up taking, and that makes American agriculture and trade policy a continuing open question that will leave us all on the edge of our seats until . . . .

Well, I guess we’ll have to wait and see if this ever settles down. Grab some popcorn, because this is likely to be a long and gripping movie.

 

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About the author

Ed White — Ed White has specialized in markets coverage since 2001 and has achieved the Derivatives Market Specialist (DMS) designation with the Canadian Securities Institute.

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