Illinois farmers, consumers hurt by White House trade war

Bill Knight column for Thurs., Fri. or Sat., Aug. 23, 24 or 25, 2018

Farmers cope with droughts and floods, bugs and blights and more, but dealing with a global trade war based on President Trump getting miffed would be difficult. However, this month is the first anniversary of Trump’s trade war with other nations, friend and foe, so it’s not a “what-if” future concern; it’s happening.

“Trump’s trade war will cause irreparable damage to the farm sector,” commented Jim Goodman, president of the National Family Farm Coalition (NFFC).

Tariffs reduce prices paid for U.S. exports and raise prices on imports (which lets U.S. companies raise their own prices and remain competitive). That all means less money for producers and consumers.

Of course, tariffs and retaliations are affecting all sectors, from metals and motorcycles to beer and beans, but farming is especially vulnerable. Indeed, China’s response to Trump’s $34 billion in tariffs on Chinese goods has already lowered prices for soybeans 15 to 25 percent.

Illinois is China’s 3^rd biggest trading partner, the state is a top U.S. soybean producer, and much of Illinois’ soybeans are exported – often to China, a viable market for decades.

A sampling of downstate counties shows 2017’s acreage planted in soybeans and bushels harvested: Fulton County (120,000 acres; 7.1 million bushels), Henderson (60,800 acres; 3.7 million bushels), Henry (177,000 acres; 10.4 million bushels), Knox (130,500 acres; 8.2 million bushels), Livingston (287,000 acres; 16.8 million bushels), McDonough (121,500 acres; 7.8 million bushels), Mercer (108,000 acres; 6.4 million bushels), Peoria (87,300 acres; 5.5 million bushels), Tazewell (120,000 acres; 7.9 million bushels) and Warren (120,500 acres; 7.6 million bushels).

U.S. and Chinese officials may meet this week to negotiate an end to the dispute before November’s Asia-Pacific Economic Cooperation summit, but with China’s additional $16 billion in tariffs on U.S. exports to take effect this week, and U.S. threats to add another 10 percent on $200 billion in Chinese products this fall, tensions remain.

Meanwhile, the U.S. Department of Agriculture this month reported that forecasts for crops and yields are higher than expected, with the prediction for Illinois about 64 bushels per acre, up 6 from last year.

“Combined with the continuing trade issues, average prices for soybeans appear set to be in the lower end of the current USDA price range,” said University of Illinois agricultural economist Todd Hubbs. “Soybean exports will depend on continued growth in soybean imports to non-Chinese sources.”

Economists, politicians and businesspeople warned of negative effects, but Trump seemed determined to try to bully other countries.

“The U.S. has attempted to strong-arm its trading partners by imposing tariffs,” said economist Tori Whiting of the conservative Heritage Foundation think tank. “Using tariffs as a negotiating tactic does not work.”

Also doomed is the recently promised $12 billion emergency assistance, farm advocates say.

“It will be a drop in the bucket,” said NFFC’s Goodman, a Wisconsin organic farmer.

He said the $12 billion will land in three pots: unspecified payments to producers, purchases of some commodities for food banks, and funds for the private sector to develop new export markets.

“I suspect most of it will not find its way into the pockets of struggling farmers,” he continued. “After an unknown share to farmers and the working poor, it hands the rest to Big Agribusiness for export market development. Farmers are already forced to pay a [checkoff fee] on every animal or bushel we sell for product promotion and market development. This deal gives them another pound of flesh – from taxpayers.

“The whole plan ignores the full-blown farm crisis that has been quietly growing in the countryside for years, with virtually no recognition or corrective action from Washington,” he added. “We were bleeding long before Trump took to Twitter, but now they’re playing politics.”

Conservative icon and billionaire Charles Koch last month warned that Trump’s trade policies could cause a recession. Besides hurting ordinary people and area businesses through higher prices, it adds ongoing uncertainty to the economy and to state and local revenue projections.

“The conservative Koch network is promising to punish politicians in either party who support the tariffs,” reported Steve Peoples in the Chicago Sun-Times.

Illinois Gov. Bruce Rauner’s office and a few members of the state’s Republican Congressional delegation have expressed some worry, but their response has been too quiet, ineffective or deferential to the White House.

Those who claim to represent regular Americans should demand an end to his harmful tantrum.