NOEL KING, HOST:
Tomorrow, U.S. and Chinese negotiators will meet in Washington for talks about the trade war. The stakes are very high for everyone but especially for farmers. Government data shows that the net income levels for farmers has been lower in recent years. Republican Senator Chuck Grassley represents Iowa; that's a state that's deeply dependent on agriculture. Grassley himself is from a farming family that grows soybeans and corn. I asked him if his constituents are worried, and he said the farmers that he's talking to are worried about things beyond just their bottom lines.
CHUCK GRASSLEY: You don't want to think of farmers only thinking about their own products being sold to China. Farmers know that China's stealing our intellectual property, our trade secrets. If you want to do business in China, you've got to do it the way they want you to do it, and that's give them all your technology. The farmers know that they're manipulating their currency.
KING: Senator, we've spoken to many farmers on MORNING EDITION who have told us that their bottom line is being hit hard by the trade war, that they are losing tens of thousands - hundreds of thousands of dollars. Their concern isn't intellectual property at this point. Their concern...
GRASSLEY: No.
KING: ...Is making a living.
GRASSLEY: Their...
KING: What do you say to them?
GRASSLEY: Their concern is intellectual property because there is an awful lot of intellectual property goes into the creation of the surplus that we do.
KING: The government, though, has acknowledged that this trade war is hurting farmers. In fact, last year the government offered farmers bailout money to the tune of $12 billion. You said you'd apply for it. Did you end up applying?
GRASSLEY: Yeah, I got it on 30 acres of soybeans, but I don't know how much money I got. But you're entitled to know if you want to find out.
KING: Sure, but that means that your farm must have been at risk. You must have felt that you were losing money because of the trade war, otherwise you wouldn't have applied for federal bailout money, no?
GRASSLEY: I participate in every government program that's available because it's been considered in my generation - remember, I'm 85 years old - that farmers stick together. And participating in the farm program is one way of showing you're in the same boat as everybody else is.
KING: We talked to a soybean farmer in Ohio, Chris Gibbs, about the bailout program. He took the money as well. Here's what he had to say about it.
(SOUNDBITE OF ARCHIVED BROADCAST)
CHRIS GIBBS: To have $12 billion pumped into agriculture, that's great. But that's only a one-time fix. Certainly, the taxpayer is not going to continue to do that. Why would they, for a policy that's inflicted pain, by our own government, onto agriculture? And that's the tariffs.
KING: He is not that impressed by this bailout. What do you say to a guy like Chris Gibbs?
GRASSLEY: I wasn't impressed by it. And I sat in meetings with 10 or 12 other senators a couple of times over the course of the last 18 months. And we told the president we don't want aid. We want markets. And we want trade not aid. And so farmers feel the same way that person from Ohio feels. But on the other hand, I can tell you a lot of farmers have said to me, it's hurting us temporarily. But the president's doing the right thing because you can't let the Chinese screw us on international trade, where we have $600 billion deficit.
KING: It seemed as if the United States and China were really making progress on these trade talks, and then President Trump tweeted this weekend that he plans to impose new, high tariffs on Chinese goods. He is effectively upping the ante...
GRASSLEY: Yeah.
KING: ...Right now, ahead of trade talks.
GRASSLEY: Yeah.
KING: Is that a wise move?
GRASSLEY: Based upon what I have found out from the executive branch of government, from two different sources, when our team went to China a week ago, they got over there. And they found out that the Chinese had negotiated to a certain level. They got the text for that negotiation, and it went way back from where they thought we had brought them to. We can't make the same mistake with China this time that we made in 2011, when we thought we had an agreement with the Chinese, and they didn't carry it out. So it's time, I think, to strike a very strong, enforceable deal so that farmers, even nonfarmers, can get the certainty that they need.
KING: What is your message for each side here? And what do you think is at stake if these talks break down?
GRASSLEY: What I would say is everybody benefits from freer trade. I'd say to China, you join the WTO. And you're into an organization that has to live by the rules of trade. You aren't living by them by not enforcing, let's say, intellectual property. I'd say to the United States, we ought to be setting the pattern for the rest of the world on trade because that's what we have done since World War II.
KING: And Senator, to the farmer who says, look. I don't care about intellectual property. I've got a small farm - relatively small farm. I just need to make a living. I need to eat. I need to not lose money. Would you tell them, hold on?
GRASSLEY: Very definitely. If this is all successful - and I know today that's a big if. But if this is all successful, not only is that farmer going to be better off, but the entire world is going to be better off because free trade has proven itself with the reduction of global poverty, with the enhancement of the middle class worldwide.
KING: And if this is not successful?
GRASSLEY: If it's not successful, we'll continue to go on and try to accomplish what we can in ways other than China.
KING: Senator Chuck Grassley of Iowa, thank you so much for being with us.
GRASSLEY: Thank you very much. Goodbye.
KING: All right. NPR's chief economics correspondent Scott Horsley was listening into the senator's interview.
Scott, what stood out to you there?
SCOTT HORSLEY, BYLINE: Noel, I was just in Senator Grassley's home state of Iowa over the weekend, and farmers there have really suffered a series of gut punches - not only low crop prices and then the trade war, but now they're dealing with historic flooding. Farmers are resilient. And like a lot of Americans, they do want to see changes in China's behavior. But they are carrying a heavy load in this trade fight. Chris Gibbs, who you all spoke with earlier this week, talked about soybean prices dropping by $3 a bushel. That $12 billion government aid package pays, at most, $1.65 a bushel, and that's for farmers who qualify. A lot of crops get less than that.
And Noel, it's not just China in this trade war; you know, Trump's withdrawal from a big Asia-Pacific trade deal is hurting beef farmers who are trying to do business in Japan. Dairy farmers in Wisconsin and elsewhere in the Midwest are hurting because Mexico is not buying as much of our cheese anymore. Senator Grassley himself has complained about the president's tariffs on steel and aluminum. America has the world's most productive agriculture, but the president's trade policies have given farmers a tough row to hoe.
KING: NPR's chief economics correspondent Scott Horsley.
Thanks, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
