LaHood talks farm bill, China consequences

PEORIA, Ill. — Could the United States see another trade war with China?

It is a possibility, according to U.S. Rep. Darin LaHood, a Republican member of Congress and member of the newly-created House Select Committee on China.

“The short answer is if we go after China, we may end up in a trade war. And what happens in a trade war? The first pawn in the trade war is ag. That’s what’s going to happen,” he said.

“All I am saying is if we want to force China to make changes, the way we do, it’s going to cause some pain.”

LaHood addressed the consequences of cracking down on China from an economic, military and diplomatic standpoint at the Mid-West Truck and Trailer Show in Peoria.

He also discussed his ideas on the upcoming farm bill negotiations, as the new farm bill faces a divided Congress, with a Republican majority in the House and a Democratic majority in the Senate.

LaHood focused on China and what the new mission of the bipartisan House Select Committee on China will be.

The committee was one of the first created by Republicans upon gaining the majority in the House after the 2022 midterm elections.

The committee, formally the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, is bipartisan, with 13 Republicans and 11 Democrats.

“In the World Trade Organization, we’ve had 22 cases against China and we’ve won 20 of those. Blatantly they show that they don’t abide by the same rules and standards, that they cheat and they are deceitful in how they do it,” LaHood said.

Even so, LaHood said a careful approach must be taken when tackling the China issue, because there are economic consequences for the United States, from agriculture to manufacturing.

“The flip side is 30% of the corn and soybeans growing in my district go to China. They are our biggest market with 500 million people in their middle class,” he said.

“I have the largest concentration of Caterpillar workers anywhere in the world in my district, right here in the Peoria area, with about 11,000 to 12,000 Cat workers. Caterpillar has 29 manufacturing plants in China and four R&D facilities, that are major R&D facilities, in China.

“So, when you think about, boy, we ought to cut China off, we’ve got to be more forceful, militarily and otherwise, you have to think about how they are intertwined.

“A lot of people want to build a Cold War mentality with China and I think there are good arguments for that, but if you think about the Cold War we were in with Russia, we didn’t have an economic relationship with Russia. We do have an economic relationship with China.”

He condemned the current administration for being “asleep at the wheel” when it comes to building up allies in the Indo-Pacific region.

“We have a lot of allies that feel the same way about China that we do, Japan, South Korea, Indonesia, Australia, New Zealand, Philippines,” he said.

“We have to focus on how we put together a trade agreement with those likeminded allies, that has an enforcement mechanism, that sets the rules of the road for trade, and isolate China on that.”

He acknowledged that isolating and taking action could cause harm to U.S. interests.

“It’s a balance. This will be a balance. There will be some pain. But I think most people think it’s worth doing that because of the consequences of what China is engaged in,” he said.

LaHood took questions from his audience after his remarks and said he favors keeping the commodity and nutrition titles united in one farm bill.

“Some people have said why don’t we split this out and do ag policy and then deal with this. We can’t do that. We’ll never get it passed. We can’t split the bill. We have to make sure that we are rowing in the right direction on that,” he said.

But LaHood did call for examination of programs under the nutrition titles and some revamping if necessary.

“What we ought to do is look at these nutrition programs, look at the food stamp program, figure out how to make them more efficient, more effective, figure out how we get people off these programs quicker and get them into jobs that are out there,” he said.

“We’re going to have a conversation about that, but I am not of the opinion of splitting the bill to do that.”

LaHood said he wants to make sure that federal crop insurance remains part of the farm bill.

“We’ve got to make sure we keep that in there. We’ve reformed it and made it leaner and better. You always have people on the other side who don’t come from rural America, have no idea about crop insurance and they want to get rid of it. That’s a mistake and something we will be looking out for,” he said.

LaHood also warned that Democrats may again try to revise the stepped-up basis tax provision.

“Democrats want to tax everything. Two years ago, the Biden administration wanted to change the stepped-up basis. We stopped it, but they are going to come at us again this year,” he said.

“You have to remind people — there are less and less members of Congress who come from rural America now or ag areas — and so we have to stand strong, Republicans and Democrats who come from rural areas, and remind people that stuff like changing stepped-up basis would be devastating to family farms or to family businesses.”