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North Alabama still impacted by U.S., China trade war

While a temporary trade truce may have just begun, many in north Alabama who rely on global trade are still feeling the sting of the existing trade war between the U.S. and China.

Posted: Feb 18, 2020 7:16 PM
Updated: Feb 19, 2020 8:26 AM

While a temporary trade truce may have just begun, many in North Alabama who rely on global trade are still feeling the sting of the existing trade war between the U.S. and China.

Mike Tate is one of them. He and his family have owned Tate Farms in Meridianville for generations. Cotton is a major crop here.

"It's a lifetime dream for me to be a part of this," said Tate. 

However, the recent China retaliatory tariff on his and other farmers' exports are more like nightmares.

"When we first heard about it, it was like, 'Oh no, not now, not when we have things going our way and then this happens.'"

Tate estimates that China's tariff on exports has cost his farm hundreds of thousands of dollars. It's a struggle, but he is siding with President Donald Trump and is willing to tough it out.

"It is business. It is good business," said Tate. "We need to have trade deals that are more free and more fair."

According to the U.S. Chamber of Commerce, Alabama exports of more than $3 billion are threatened by Chinese tariffs. That includes passenger vehicles and farm commodities like soybeans and cotton.

It's not just farmers impacted by the China tariffs.

"The way the farm economy goes has a direct effect on the overall impact of this state," said Mitt Walker, director of the Alabama Farmers Federation. "When you think about feed, seed, the purchases of food, transportation, electricity, all of the things that go into producing a crop have a trickle down effect." ​

Millions of dollars in farm exports of Alabama commodities like poultry, cotton and soybeans are shipped to China. One way to bypass the pain of China tariffs is to search for new trade partners.

Trump recently signed the new Mexico-Canada trade agreement, which opens up Alabama farmers to new markets. ​

However, finding a new market is not necessarily an option for some global companies like AdTran in Huntsville. Its clients include communications service providers to help customers stay connected.

AdTran is dependent on high-priced Chinese parts to make components for those companies.

"At this point in time, it's a cost you have to bare," said Gerry Kelley, AdTran director of global operations. ​

AdTran made the decision to pay the higher price because it's hard to find them elsewhere and to keep their 1,500 workers on the job.

"It's good to have a company like this that's doing everything they can to keep us employed," said an AdTran employee of 20 years, Regina McKinney.

Keeping McKinney and others employed may be getting a bit easier these days now that it appears we're beginning to get past the worst of the trade war with China.

Recently, the U.S. and China signed a phase one trade deal that reduces costs for Chinese products while promising farmers China will spend billions of dollars on commodities.

China also just announced that it will allow importers to apply for exemptions to additional trade war tariffs on nearly 700 types of goods from the U.S., including farm and energy products. This comes as China battles the coronavirus outbreak that has infected more than 70,000 people.

But, before we get too excited about a trade truce, here's a word of caution.

"A lot of the reasons why we have been in this situation with China is that they have not always held up to what they committed to," said Walker. "So I think enforcement is going to be extremely important to this agreement to make sure they follow through to those commitments."

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