“Agriculture needs certainty, not more tariffs…Farmers have been patient and willing to let negotiations play out, but with each passing day, patience is wearing thin,” said National Corn Growers Association President Lynn Chrisp, according to CNN, in a joint statement along with the heads of the country’s leading wheat and soybean industry groups. Farmers, already hit hard by President Trump’s tariffs and by retaliatory tariffs in response, were dismayed after Trump announced a further escalation of tariffs against China, increasing 10% tariffs to 25% on $200 billion of Chinese products.
Both Trump’s escalated tariffs and the joint statement opposing those tariffs from the leading corn, soybean, and wheat industry groups came out on Friday, with China making the announcement today that they would of course be retaliating, with additional tariffs on some $60 billion of U.S. products starting June 1. Trump claims his escalation will bring the Chinese back to trade negotiations that have been lagging, but it does not inspire confidence that Trump has any sort of a solid plan, given that his tactics have thus far been unsuccessful and he keeps making claims about the tariffs that are untrue, particularly his claims that it will be the Chinese, and not American companies and consumers, that will bear the costs of these tariffs. Farmers, many of whom thought Trump’s presidency would help them economically, are now faced with the reality that this has not at all been the case, with Trump’s policies ending up requiring additional government subsidies for farmers, subsidies which only partially offset their losses due to the tariffs and the ensuing trade war. According to CNN:
American farmers are running out of patience with President Donald Trump’s trade war with China. …Soybean, corn, and wheat growers have been battling tariffs from China for nearly a year now. Beijing imposed those duties in retaliation to tariffs put on Chinese products by the Trump administration. The tariffs made those American agricultural products more expensive for Chinese importers, and private buyers have mostly stopped buying American-grown soybeans or wheat. But Trump has sounded positive about progress toward a deal that would lift those tariffs since meeting with Chinese President Xi Jinping in December, and farmers took Trump’s reassurances seriously. …”This can’t go on for an extended period of time. We need a trade deal done soon, and in the meantime farmers are probably going to need another round of aid payments,” said (farmer and director of market development at the Iowa Soybean Association Grant) Kimberley.
Soybean farmers were hit particularly hard by the trade war with China, since China is the largest export market for American soybeans; Chinese purchases of American soybeans nosedived last year as a result of the tariff barrage. As part of ongoing trade negotiations, China had agreed to purchase more soybeans from the U.S. this year, but that has thus far not made up for last year’s losses.
Trump’s tariffs continue to inject uncertainty, uncertainty in the financial lives of farmers, manufacturers, and consumers, uncertainty in the stock market, as seen by its more than 600 point drop today, viewed by market analysts to be caused by Trump’s escalation of tariffs, along with China’s retaliatory response.