Why are we doing this?
As President Donald Trump’s trade war with China heats up, southeastern Minnesota soybean farmers are asking that question and need answers fast. They’ve become front-line troops in what’s becoming a major trade conflict with one of America’s best trading partners, and so have the rest of us in Midwestern farm states.
So far, the biggest concern for area farmers is the Chinese tariff on soybeans. China is the world’s biggest buyer of soybeans and the biggest importer of U.S. beans. Minnesota is the third-largest producer.
Fears of a full-blown trade war have pummeled crop prices, and soybean prices last week hit a two-year low. Contract prices on the Chicago Board of Trade were at $8.87 per bushel last Monday, the lowest since March 2016.
But farmers in Brazil couldn’t be happier. They’re expected to fill the gap and grow their business with China, as are other nations who can’t wait to get a piece of China’s global appetite for soybeans.
The Des Moines Register estimated recently that China’s tariff on soybeans would cost Iowa farmers up to $624 million in lost income annually. Iowa is No. 2 among the 50 states in soybean production.
The president of the American Soybean Association, Iowa farmer John Heisdorffer, told the Des Moines paper, “Farmers are feeling a real pinch. If we can’t get these commodity prices up ... we are going to start losing farmers. There’s no way of getting around it.”
And this leaves aside other tariffs, threatened or imposed, that affect area farmers. China has added a 25 percent tariff on U.S. pork imports, and Mexico plans a 20 percent tariff on ham and pork shoulders. Those two moves would cost Iowa pork producers $360 million this year.
As if to prove the U.S. isn’t just disrupting its trade relationship with one of the greatest powers in Asia, the White House also announced tariffs recently on steel and aluminum imports from Canada, Mexico and the European Union, outraging those closest of American allies. Total U.S. exports to the E.U. are worth even more than China, $720 billion annually.
So, again, why are we doing this? The White House says our trading partners have taken advantage of us for years, we’re running huge trade deficits with China and others, and the president is determined to even the score. In a tweet in March, he said this: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore — we win big. It’s easy!”
Well, we’re about to find out how easy it is — and it’s America’s farmers who will bear a huge part of the burden. If this trade war goes forward, almost certainly we’ll lose farmers, farms and a way of life for many people in southeastern Minnesota.
FROM AN EDITORIAL IN THE ROCHESTER POST-BULLETIN