The president-elect has threatened 60% tariffs on goods from China at a time when U.S. producers are already struggling with slowing exports and falling prices.
As Donald Trump prepares to start a second term in office, farmers are bracing for the prospect of increased tariffs and another painful trade war at a time when U.S. exports already remain uncompetitive.
Trump has threatened a blanket 60% tariff on goods from China in what would be a significant escalation from the first trade war, when duties reached a high of 25%. The former president has also floated 10% to 20% tariffs on other imports.
China remains the largest export market for U.S. farmers, and tariffs reduced agricultural exports by $27 billion in the 18 months or so following the start of the trade war in mid-2018, a report from the U.S. Department of Agriculture found.
Higher tariffs could further erode market opportunities for farmers as they struggle to compete with lower-priced commodities from other countries. If China were to retaliate with its own 60% tariffs on U.S. farm goods, it would result in a loss of 25 million metric tons of soybean exports and 90% of corn exports, according to a study commissioned by National Corn Growers Association and American Soybean Association.
The certainty of new trade aid remains unclear, however, as Republicans look to limit spending under the USDA’s Commodity Credit Corporation, which was the funding mechanism used to make initial trade payments. Government aid is also unlikely to make up the full losses of reduced trade from China.
Tim Burrick, a farmer from Arlington, Iowa, said he saw the value of his hogs, corn and beans drop $2 million in three months following the start of the first Trump trade war. Trade payments only covered about 10% of the losses.
“It was just a complete disaster,” Burrick said of the trade war in September during a Farm Foundation presidential debate on agriculture policy. “The more I hear about tariffs, the more nervous I get.”
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