Trump fold tariffs and scares agro from the USA

Trump tariffs raise costs and reduce exports, leaving American farmers on maximum warning against the trade war

It was three difficult years for US farmers. The costs of everything, from gasoline to feed and equipment, increased, while the prices of most crops fell. Now many farmers say they are concerned with the fact that President Donald Trump’s incipient trade war make things even harder.

“He is out there with his demolition ball, imposing tariffs everywhere,” says Barb Kalbach, a fourth -generation corn and soy farmer in Dexter, Iowa.

25% Trump rates on Canada and Mexico products came into force on Tuesday, and the president doubled the rate of China’s products to 20%. China retaliated with rates of up to 15% on US agricultural imports, while Canada and Mexico announced their own retaliatory tariffs. Canada’s 25% rates about US $ 30 billion in American products affect birds, meat, dairy, wheat and other food products.

Farmers know from experience that these retaliatory tariffs will harm them. When Trump started a trade war against China in 2018, Beijing responded with tariffs directed at the US agricultural sector. Exports fell when Chinese buyers sought soy in places like Brazil, reducing the participation of US farmers in the market. Farmers were so hit that the Trump administration eventually spent $ 23 billion to compensate them.

“Agriculture was the most affected by China’s retaliatory tariffs last time, and it will certainly be the main target of today’s retaliatory attacks,” says Marc Busch, a professor at the Georgetown Foreign Service School of Foreign Service. This time, it is not only China that is retaliating, but also Mexico and Canada, two of the leading US business partners. “The expectation between the stakeholders in agribusiness is that it will be even worse this time,” says Busch.

Kalbach, Iowa’s farmer, fears that new tariffs make it even harder to export their products. “This will only take parts of our markets,” she says.

In the last trade war, about 80% of the money that the US government raised with tariffs on Chinese imports has been reversed to pay farmers harmed by retaliatory tariffs, says Busch. These payments maintain farms to light, but what will really boost the agricultural sector is to find new markets, says Clark Packard, a Cato Institute researcher. “It’s a question of whether we want assistance payments or if we really want to make sales,” says Packard. “We are returning to this business of increasingly distributing payments to the agricultural sector.”

According to the US Agricultural Federation, US farmers have lost money in “almost all main crops” in the last three years. “Adding even more costs and reducing markets to US agricultural products,” said Federation President Zippy Duvall in a statement, “can create an economic burden that some farmers may not be able to support.”

Trump addressed these concerns in a social truth post, encouraging farmers to sell more products within the US. “For large US farmers: Get ready to start producing many agricultural products to be sold within the United States. External products rates will come into force on April 2. Have fun! ”He wrote on Tuesday.

But farmers say that limiting sales to domestic markets would hurt their business and reduce prices. The US exported $ 83 billion in agricultural products to Canada, China and Mexico last year, according to the agricultural office.

“We are very good at producing healthy, safe and economic foods to the point of producing much more than this country needs,” says Chad Franke, Rocky Mountain Farmers’ Union, which represents 14,000 farmers in Colorado, Wyoming and Mexico. “To say that we will only sell in the domestic market is like saying that you should put 20 gallons of gasoline in a 15 gallons tank.”

Take the dairy industry as an example. About 20% of US milk production is exported annually, with approximately 40% of this going to Canada, Mexico and China, according to Chuck Nicholson, an associate professor at Wisconsin-Madison. If the household dairy industry receives only a little more milk than traders expected, prices fall as a result, says Nicholson. Therefore, if the dairy industry started trying to sell these 20% in the domestic market instead of exporting them, prices would fall, making it difficult to continue farmers’ operations.

In addition, Trump administration policies are already causing headaches to milk producers, adds Nicholson, from repressions to immigration to possible cuts in government programs such as meal vouchers, which contribute to the demand for domestic dairy products. Farmers are uncertain about which markets will still want their products, if the federal employees with whom they work daily will still be there the next day, how much the agricultural equipment and gasoline will cost, and how much they can sell their crops.

“Farmers and ranchers already have enough uncertainties in their daily lives,” says Franke, president of Rocky Mountain Farmers’ Union. “They don’t need more.”

With information from Time Magazine*