The United States trade dispute with China has escalated in recent days. Last week, the U.S. raised tariffs to 25% from 10% on almost all Chinese goods. Then on Monday, China retaliated by raising tariffs on $60 billion of American goods.
President Donald Trump has been right to take on the unfair trade practices that China has gotten away with for years. He said the increased tariffs were in response to China reneging on items that had been agreed to in trade talks.
But while Trump may be right in taking on China, its American consumers and farmers, as well as the Chinese economy, that will pay the price for the trade war.
A report last week from the Nebraska Farm Bureau detailed the cost to Nebraska farmers. It said Nebraska agriculture exports were down about $200 billion in 2017, with most of the decline coming in decreased exports of soybeans and corn.
Its no coincidence those declines coincide with U.S. tariff threats made against some of our largest trading partners like China, Mexico and Canada, said Jay Rempe, a Nebraska Farm Bureau senior economist and author of the report.
Besides China, tariff threats against Mexico, Canada and the European Union also have hurt exports, the report said.
Steve Nelson, president of the Nebraska Farm Bureau, said the report shows that we cant understate the importance of agricultural trade to Nebraska, but it also reflects the sensitivity of agriculture markets to negative talk surrounding trade policy.
While Trumps trade fight with China may be overdue, its timing couldnt be worse for agriculture. Commodity prices were already depressed and farmers were struggling to make a profit or break even. The downturn in exports only served to drive prices down even more.
On top of all of that, the flooding that hit Nebraska and the rough spring weather have hammered the state and delayed planting.
All of that means that Trumps trade strategy better start paying off soon. Farmers cant continue on the current path much longer.
It will lead many to question why Trump abandoned the Trans Pacific Trade Partnership, which would have put more pressure on China.
Instead, the tariffs are depressing trade and hurting agricultural markets.
As Nelson said, Between the blizzard and flooding disasters that have hammered our state, and the overall downward trajectory of the agriculture economy, farmers and ranchers are in desperate need of a win on trade.
