It has become common practice among the mainstream media every time news erupts in the current tariff war with China to produce stories about the negative impact of the moves but ignore the positives, and the Associated Press provided a classic example of this on Tuesday.
“China’s announcement Monday of higher tariffs on $60 billion of American exports – retaliation for President Donald Trump’s latest penalties on Chinese goods – hit particularly hard in the farm belt,” wrote David Pitt of the AP under “US farmers who sell to China feel pain of Beijing’s tariffs.”
Farmers had been hopeful since December, when the US and China appeared close on a trade deal, that soybean sales to China would resume, Pitt wrote. He quoted “an Omaha-based grain market analyst” and the head of the American Soybean Association expressing frustration with the moves to add tariffs.
“This is hitting the market at a very emotionally distressful time,” the grain market analyst said. “The rug of hope was pulled out from under us and especially with the announcement this morning that China is going to retaliate with higher tariffs of their own.”
The soybean association executive was quoted as saying “The sentiment out in farm country is getting grimmer by the day. Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting.”
But are the tariffs really the problem in farm country? To some extent yes, which is why Trump is pushing for a cash bailout for some farmers.
But as Todd Hultman, the grain market analyst said, “This is the fifth year of low prices, basically, for crops. I think time is just wearing us out.” Five years, of course, predates not only the tariff war with China but the administration of Donald Trump.
Pitt hinted at other problems as well, although he made sure to tie them to Trump’s policies.
“A slowdown in soybean sales, and the huge stockpiles that result, has a ripple effect,” Pitt wrote.
“Farmers in many parts of the corn belt have suffered from a wet and cooler spring, which has prevented them from planting corn. Typically when it becomes too late to plant corn, farmers will instead plant soybeans, which can grow later into the fall before harvest is required. Yet now, planting soybeans with the overabundance already in bins and scant hope for sales to one of the biggest buyers in China, could raise the risk of a financial disaster.”
Pitt wrote that Trump said his bailout will make farmers “very happy” and noted the administration handed farmers $11 billion in aid last year to offset losses from trade conflicts.
He then quoted another farmer, Brent Gloy of Grant, Neb., saying he sees no end in sight to the trade dispute and that “I think it’s just a lack of a coherent plan.”
What Pitt or others rarely point out is what the U.S. gets from these trade negotiations. For one example, the U.S. just raised tariffs on $200 billion of Chinese goods. The Chinese retaliated with $60 billion in tariffs on US goods. We simply have much more to place tariffs on that they do.
The U.S. and China were close on a deal, but the U.S. backed off because China refused to commit to measures to stem theft of U.S. intellectual property and technology.