Pub. 7 2018 Issue 6

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 8 A s I have traveled the state over the last three years, both during the campaign and since serving in Congress, there is no topic that I have heard more about than trade. The topic of trade’s prevalence in town hall discussions and roundtables should come as no surprise, given its importance to our Kansas economy and the rapid shifts in policy we have seen under the Trump administration. Unfortunately, while many of us welcome stronger enforcement of trade agreements, our Kansas farms, ranches, and small businesses have been caught in the crossfire. Since February we have seen some commodity prices drop by 20 percent. As few of our community banks are firsthand participants in providing global financial services, the initial threat of tariffs or a trade war to our local banks is often overlooked by most, but as a longtime board member of Farmer's Bank and Trust, I know first-hand the concerns our local bankers have from the fall out of these trade damages. There is potentially no industry more dependent on trade than agriculture, and in Kansas’ first district, agriculture’s footprint is 60 percent of the economy. At the end of the day, our local banks are successful when the communities they serve are successful and growing. Many of our rural banks can cover up to 80 percent of producers’ loan volume, so the threats to abandon trade agreements and retaliatory tariffs, rightfully has our banking community anxious. Currently, tensions and tariffs are escalating with China and NAFTA negotiations are stuck in a standoff with Canada and Mexico. Right now, the estimates for losses to our agricultural industry are in the tens of billions. Many producers are facing drought conditions, a subpar harvest, and the prospect of struggling to pay back operating loans. That has producers filled with uncertainty. Where last year, many loans could be restructured, this year that will be a more difficult process as land values start to slide. The impacts of these challenging financial times don’t stop at the farmgate though, they ripple through our rural communities, impacting equipment manufacturers, input suppliers, and small businesses. When these community businesses struggle, community banks face tough choices and few options. As the trade war gets ugly, little comfort is brought to the bankers I hear from. The president has rightfully recognized the harm being done to rural economies and announced $12 billion in aid to farmers and ranchers affected by retaliatory actions, that’s a good short-term step and should bring some certainty to Kansas bankers when working with customers this fall. But it is far from a long-term solution. More than a year ago I was among the first House Republicans to publicly sound the alarm and rally fellow members around preserving trade agreements. Since then, my ideas haven’t changed. Let’s get a NAFTA agreement done, and then let's turn to proactive trade agreement negotiations. President Trump has received a great deal of praise as a negotiator; I’m excited to see him in action, working on behalf of American agriculture. Let's get back to the negotiating table with Japan, let’s restart those discussions with the rest of Southeast Asia. With more than 95 percent of the world’s population living outside our borders, we have to have new agreements, or we can’t grow. The president is right to be concerned about China’s behavior. They steal hundreds of billions of dollars of U.S. companies’ intellectual property, they depress world prices for corn and wheat and they pick state-owned businesses to compete with American companies on a playing field that can never be level. The president deserves a lot of credit for taking on this challenge and not sweeping it under the rug as so many other chief executives have done. However, arriving at a successful conclusion is going to require the help of our allies and we know that President Trump can strike a deal, but he needs to do it soon. Today 625 rural counties (nationwide) do not have access to a community bank; we cannot raise that number. FALLOUT FROM TARIFFS HURT OUR COMMUNITY BANKS Congressman Roger Marshall, M.D. (Kansas-01)