When the Trump administration started its trade war with China last summer, most farmers stood with the president, even though it cut into one of the largest markets for the crops they grow.
Farmers accepted the line that there might be some short-term pain for long-term gain. Besides, their pain was mitigated by the $11 billion in additional aid to farmers the federal government handed out to offset their losses from the trade conflict.
As the tit-for-tat tariffs are now being escalated, support from U.S. farmers for Trump’s aggressive approach to trade is starting to erode.
On Monday, the American Soybean Association sounded a major note of discontent. “Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting,” said the trade association’s chairman, John Heisdorffer, an Iowa grower.
There may be some places in the Rust Belt that are benefitting from this fight with China, but it’s definitely not helping the Farm Belt.
When China counters U.S. tariff hikes with ones of its own, farmers are among the groups that take the brunt of the trade retaliation, since China imports a lot of agricultural products to feed its massive population. When U.S. soybeans get too expensive for the Chinese to buy because of the tariffs imposed on them, other countries that grow soybeans fill the void, taking away U.S. market share in that country.
The slowdown in sales to China has caused the U.S. to stockpile a huge inventory of soybeans, waiting for the trade fight to resolve itself. But with those surpluses and not enough places to sell them, the result is further downward pressure on already low commodity prices.
To make matters worse, a wet spring has left farmers in corn country with few options other than planting soybeans. Planting more of a crop, though, for which there is already too little demand is a financial disaster waiting to happen.
Of course, there will be another multibillion-dollar taxpayer infusion of farm aid to try to minimize the impact of the tariffs, but that just pushes the cost onto some else. And it still probably leaves farmers in worse financial shape than they would have been had the president never started the trade war.