Republican and Democratic lawmakers urged President Trump on Tuesday not to break a trade deal with South Korea, saying the agreement was vital to key industries in America's heartland.
Rep. Kevin Brady (R-Tex.), Rep. Richard Neal (D-Mass.), Sen. Orrin Hatch (R-Utah) and Sen. Ron Wyden (D-Ore.) released a joint statement Tuesday defending the five-year-old U.S.-Korea Free Trade Agreement, which business leaders say has boosted the very workers who voted Trump into the White House.
“South Korea is a significant economic partner, our seventh largest export market, and a vital customer for U.S. manufacturers, services providers, farmers, and ranchers,” the lawmakers wrote.
Doubts about the future of the deal first surfaced Saturday after The Washington Post reported Trump officials were considering a withdrawal. A day later, North Korea announced it had tested a hydrogen bomb that could be mounted on an intercontinental missile.
The lawmakers' statement echoed an argument from Sen. Ben Sasse (R-Neb.), who also challenged Trump this weekend.
"His Administration holds 18th-century views of trade as a zero-sum game,” Sasse said in a tweeted statement. “I side with our farmers and ranchers who are feeding the world now.”
As of Tuesday, Trump had yet to reach a decision on what to do about the trade agreement with South Korea, a senior White House official said.
Negotiations for the free trade deal began under President George W. Bush, and Congress approved the agreement in 2012. KORUS has since produced mixed results: the U.S. trade deficit with South Korea has more than doubled since the deal took effect, but certain industries have flourished.
Major industries that would feel an immediate sting if Trump chose to back out of the deal include beef and dairy, two of the Midwest's largest employers, which have seen exports surge to South Korea since KORUS knocked down trade barriers. There are roughly 913,000 cattle operations in the United States. Dairy employs about 977,000 workers.
U.S. beef has particularly benefited from business with Koreans over the last five years. Under KORUS, which lowered tariffs on U.S. meat, beef producers have recorded an 82 percent increase in annual sales to South Korea, jumping to $1.06 billion last year from from $582 million in 2012.
South Korea is the second largest export market for U.S. beef, behind Japan, according to the National Cattlemen’s Beef Association. (It's also in the throes of what the U.S. Meat Export Federation calls “a craft burger craze.”)
Cutting off access to Korean buyers would lower the demand for beef and zap profits across the industry, said Kent Bacus, director of international trade and market access at NCBA.
“The last five years, we have been reaping the benefits,” Bacus said. “For the president to threaten to walk away from this — it’s very dangerous for our business. It’s dangerous for farmers and ranchers who rely on the value they get through exports to be able to pay their bills.”
One such rancher is Dawn Caldwell, co-owner of Caldwell Cattle in Edgar, Neb. She and her husband, Matt, tend to about 150 cows on roughly 900 acres of land — a small operation by beef industry standards.
She fears withdrawing from KORUS could put her out of business.
“We’d be less able to absorb the impact,” she said. “And it could get to the point where I have to sell my great-grandmother’s land to one of the bigger operations. That would completely break my heart.”
The dairy industry, too, stands to take a blow if Trump decides to scrap KORUS.
South Koreans bought $170 million worth of American-made cheese in 2016, said Michael Dykes, president of the International Dairy Foods Association. The country is the fourth largest market for U.S. dairy exports.
Abandoning the deal, Dykes said, would put dairy farmers at risk of facing steep tariffs, which added 36 percent to the price of cheese sold in Korea.
“We’ll go back to about 36 percent while all of our competitors in other countries will continue to go duty free,” he said.
Josh Meltzer, senior fellow in global economy and development at the Brookings Institution, said reduced earnings that come from less trade in these agricultural industries could spark layoffs across rural America. (The biggest producers of beef and dairy include Wisconsin, Nebraska, Iowa, Indiana and Illinois.)
“You have less exports, less sales and potentially a need for fewer workers,” he said.
One sector of the economy that is less threatened by the potential end of KORUS is the steel industry, whose representatives have accused China of dumping cheap, government-subsidized steel into the country by way of South Korea.
Two cases on the matter sit before the International Trade Commission, said a lawyer who represents the U.S. steel industry and who spoke on the condition of anonymity because of pending litigation. The industry would like to see Trump stamp out the problem, which, representatives say, pushes American steelworkers out of jobs.