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U.S. Dairy Industry Supports Changes to Section 232 Process
Iowa Ag Connection - 02/07/2019

The U.S. dairy industry endorsed bipartisan, bicameral legislation to reform a powerful White House trade tool to ensure it is used as intended by Congress to respond to genuine national security threats. Rolling back current retaliatory tariffs and keeping others from forming in the future is the dairy industry's top trade priority. America currently sends 16 percent of its dairy production overseas, and industry officials see a lot of room for expansion in the future.

The Trade Security Reform Act, sponsored by Reps. Ron Kind (D-WI) and Jackie Walorski (R-IN), and Sens. Rob Portman (R-OH) and Doug Jones (D-AL), aims to change the process by which the Administration imposes Section 232 tariffs. The Portman-Jones and Kind-Walorski bills tighten Section 232 rules to ensure it is only used for true national security purposes while taking into consideration a number of economic and security concerns. To do so, the legislation instructs the Department of Defense to investigate possible threats, and, when a legitimate threat is identified, asks the Department of Commerce to develop recommendations to respond. It also enhances the role Congress plays in the Section 232 process.

Section 232 was created by Congress to combat trade issues that pose a national security threat. In recent years, this process has been used to levy duties on imports of steel and aluminum from Mexico and other countries. In response, Mexico imposed retaliatory tariffs on a range of U.S. goods, including cheese. Those retaliatory tariffs have been a heavy weight on U.S. cheese exports to our largest export market. An economic study released by Informa Agribusiness Consulting estimates lost dairy exports of $1.1 billion over five years unless those tariffs are dropped. To date, the U.S. government has refused to remove the steel and aluminum tariffs and as such, Mexico has maintained its retaliatory tariffs.

"Dairy prices have steadily fallen since Mexico imposed its tariffs, harming farmers," said Jim Mulhern, president and CEO of the National Milk Producers Federation. "Exports to our most important market are being threatened, hurting dairy businesses and the thousands of Americans they employ."

"Agriculture is being hurt by retaliatory tariffs; the bill's sponsors should be applauded for finding a common-sense process to a complex issue," said Tom Vilsack, chairman and CEO of the U.S. Dairy Export Council. "It protects one of the president's tools to combat threats to our national security while allowing for the full consideration of true safety and economic factors at play."

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