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US Senate ignoring pending tariff disaster from Canada

Jack Lessenberry

Thanks in part to Donald Trump, terrorism and pit bulls, here’s a story you may not have heard about, but which could have a major negative impact on our economy.

Two days ago, the World Trade Organization, or WTO, ruled that Canada was fully justified in going ahead and imposing $780 million dollars in retaliatory tariffs on American goods, primarily meat, because of unfair trade practices by the U.S. government.

This could go into effect possibly as soon as later this month, Canadian Consul General Douglas George told me yesterday. Canada hasn’t decided just what products to levy tariffs on, but this will likely cost Michigan farmers tens, maybe hundreds of millions of dollars. That won’t be good for our economy, obviously. And America has nobody to blame but ourselves. The U.S. Senate can still fix this, but they need to work fast.

The issue is over something called Country of Origin Labeling, or COOL, and stems back to a law Congress passed seven years ago, requiring meat be labeled with its “country of origin.” That might make sense when it came to China, but not when it came to Canada. The U.S. Department of Agriculture confirms that there have never been any food safety issues with Canadian meat; it is as safe as our own.

Prior to COOL, Canadian and American farmers and ranchers traded livestock all the time, and freely sold animals back and forth. But COOL meant that Canadian animals had to be segregated, penned and processed separately, and that added expense. America started buying less Canadian meat, hurting business there.

This also violated agreements we have with our largest trading partner. Canada took their dispute to the WTO. They ruled against Washington. We appealed, and lost again.

We found a way to bring up the case a second time, lost again, and lost another appeal. We are out of options, except for one: Congress needs to speedily repeal the COOL law. The House of Representatives saw what was coming and repealed COOL late last spring. But the U.S. Senate has been dragging its collective feet.

The time for that is over. Most farm industry groups get that. Philip Ellis, the president of the National Cattlemen’s Beef Association, said after the ruling that the labeling law had already cost our livestock industry billions.

Unless the Senate acts soon, he said, our beef exports could face a 100 percent tariff, not only in Canada but Mexico, which also was affected and can issue its own punitive tariffs.

Michigan doesn’t do a great deal of agricultural business south of the border. But nearly sixty percent of our farm exports go to Canada. The tariffs may not just be on meat, but on corn and cereals and baked goods. It could have been worse; Canada wanted to levy nearly three times the tariffs the international body actually sanctioned. But the situation is bad enough.

AgriPulse, the respected farm industry newsletter, has advised Congress to throw in the towel, saying, “If we are going to have global trade, it needs to be rule-based,” and we’ve been breaking the rules.

Our own Debbie Stabenow is the ranking Democrat on the Senate Agriculture Committee. She needs to help speedily fix what’s about to become an expensive mess.

Jack Lessenberry is Michigan Radio's political analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

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