Escalated Tariff War Further Rattles U.S. Agriculture
On May 10, President Donald Trump instructed his administration to raise the tariffs on Chinese goods from 10% to 25%. According to the administration, this move came about because of a lack of progress in trade talks between the U.S. and China. Naturally, China announced it would do the same to many American produced goods, including cotton and grains.
With American growers and their livelihood in the crosshairs of this tariff war, the Trump Administration has pledged to help. Last year, the administration committed to providing $12 billion in aid to U.S. growers hurt by the lack of access to the Chinese marketplace. On May 10, the government offered to provide an additional $15 billion in relief by purchasing products from domestic growers impacted by these moves.
And several of those within the government said their voters – including the growers they knew – were supportive of this escalation. “Farmers know that China’s stealing our intellectual property, our trade secrets,” said Senator Chuck Grassley (R-IA) in a radio interview. “Their concern is intellectual property because there is an awful lot of intellectual property that goes into the creation of the surplus that we do.”
However, certain grower trade groups weren’t as positive in their views of the new tariffs. “We’ve been understanding during this negotiation process, but we cannot withstand another year in which our most important foreign market continues to slip away and soybean prices are 20% to 25%, or even more, below pre-tariff levels,” said John Heisdorffer, Chairman of the American Soybean Association (ASA) and a soybean grower in Keota, IA. “The sentiment out in farm country is getting grimmer by the day. Our patience is waning, our finances are suffering, and the stress from months living with the consequences of these tariffs is mounting.”
Davie Stephens, ASA President and a soybean grower from Clinton, KY, echoed these views. “The soybean market in China took us more than 40 years to build, and as this confrontation continues, it will become increasingly difficult to recover,” said Stephens. “With depressed prices and unsold stocks expected to double by the 2019 harvest, soybean farmers are not willing to be collateral damage in an endless tariff war.”