Farmers Feeling the Heat of Trump-China Trade War: ‘Our Patience Is About Gone’

May 20, 2019

By Rebecca Heilweil

Collapsed trade negotiations between Washington and Beijing have left farmers increasingly frustrated. While the administration's decision to lift tariffs against Mexico and Canada could mitigate the hurt, that progress is likely not enough to compensate for the impact of China's retaliatory tariffs on American agriculture.

The hurt has been especially bad for soybean farmers, who saw their crop prices hit a 10-year low last week.

Ongoing trade tensions will test farmers' political loyalty to the current administration (farmers overwhelmingly supported Donald Trump in 2016). "Yes, I was a supporter. And Iike a lot of farmers out there, I think that support is probably waning," Shayne Isane, a Minnesota-based farmer, told Cheddar. "Farmers have — and Middle America has — supported the president. But our patience is about gone."

There have been a few bright spots. Trump recently announced that the U.S. would be lifting tariffs on steel and aluminum from Mexico and Canada, a positive sign for farmers who will no longer face those countries' retaliatory tariffs on their agricultural products. Pork farmers, who just saw China cancel an order for more than 3,200 tons of pork, are especially relieved.

Trump tweeted the news, announcing, "Starting Monday, our great Farmers can begin doing business again with Mexico and Canada. They have both taken the tariff penalties off of your great agricultural product. Please be sure that you are treated fairly."

Jenny Hopkinson, a government relations representative for the National Farmers Union, told Cheddar that the announcement may create some small boosts for farmers, but that, more importantly, the tariffs send a signal that the United States can work with its partners. "These are some of our closest allies. It's worrying that those tariffs went in place, and that we started looking that way at our allies," she said.

"Any little bit of help there is a big improvement," said Isane.

Farmers also received some, albeit limited, good news from Japan. Tokyo lifted its long-standing restrictions on American beef sales, which had been in place since the outbreak of mad cow disease in 2005.

Hopkinson cautioned that the impact of the most recent round of tariffs will be unclear since many agricultural products were already subject to tariffs.

Isane said that to make due in the meantime, some farmers are skimping on machinery updates and better technology. "That's a good short term solution, but that could hurt us in the long run," he said. Others may be filing for bankruptcy. Isane adds that there have been "a lot of auction sales of farmers who can't make it work anymore, and it's partly due to this trade war that's gone on much longer than anticipated."

In response to a request for comment from Cheddar, the U.S. Department of Agriculture referred to a May 10 tweet from its secretary, Sonny Perdue. In the tweet, he wrote, "Just spoke with @POTUS — while China may backtrack, @POTUS is steadfast in his support for U.S. farmers and directed @USDA to work on a plan quickly. @POTUS loves his farmers and will not let them down!"

But the impact of Chinese tariffs is widespread. Earlier this year, Congressional Research Service found that, based on the earlier round of tariffs, "about 99% of the value of U.S. food and agricultural exports are subject to China's retaliatory tariffs." In its November 2018 trade forecast, the USDA determined that in 2019 U.S. exports to China would fall by about $9 billion because of the tariffs.

"I think China is a little bit tricky," Hopkinson said. "When you're talking about exporting goods to France, it's not the French government necessarily buying things. It's French importers buying stuff because they have demand." Comparatively, the Chinese government has significantly more influence over what the country will buy.

One proposed temporary solution has been additional trade assistance. Last year, the Trump administration offered farmers $12 billion in tariffs and is planning to award another $15 billion more.

"It was supposed to be a substitute for the market loss that we had due to the trade war. And it was a help, no doubt about it " said Isane. "But most farmers don't want to get that check. We'd rather get it from our markets."

In the long term, Hopkinson said that tensions with China could influence America's standing in the international market. "We do have concerns about the view of the United States as a trading partner in the world," she said. "Are we no longer as valuable as a trading partner because of all this?"

For full interview click here.