A trade war with China during the first term of President Trump struck American farmers hard. This time it can be worse.
On Tuesday, the Chinese Ministry of Finance said that the rates of no less than 15 percent would add on a wide range of agricultural imports from the United States, including chicken, wheat, corn and cotton. The retribution of Beijing for escalating American rates on Chinese products also includes 10 percent rates for the import of Sorghum, Soybeans, Pork, Beef, Water Products, Fruit, Vegetables and Dairy Products.
Without specifying which products, Canada said on Tuesday that the retaliation rates of 25 percent would impose $ 20.5 billion in American goods, and Mexico promised to outline his response to Sunday. President Trump donated 25 percent rates on Tuesday on products from both countries.
Farms are a target because agricultural products are good for a large part of American exports, said Lynn Kennedy, a professor of agricultural economy at Louisiana State University. Politics is probably also a factor.
“Rural areas are usually politically much more conservative, and therefore if you look at where the basis of Trump has been, or where the Republican base is, that has a higher tendency to be some of those agricultural states and areas,” said Mr. Kennedy.
As they did during the first Trump government, the retaliation rates can mean that American exports and paid prices for crops are falling – because importers from China, Canada or Mexico look for Brazil or other large agricultural producers for alternatives.
China accounted for 14 percent – around $ 24.7 billion – of all agricultural products exported from the United States in 2024, according to data from the Ministry of Agriculture. Mexico and Canada import even more: about $ 30.3 billion in goods for Mexico and $ 28.4 billion for Canada.
Mark Legan, a cattle and crop farmer in Putnam County, Ind., Mexico said his best export market for pork and China his biggest for soybeans, which he sells to Cargill and Archer Daniels Midland plants in his area.
When China began to buy more soybeans from Brazil during the first term of Mr Trump, Mr. Legan's income dropped considerably, “he said. His pig export to China also fell. This time he is again worried about the fall -out – mainly because Mexico is also ready to take revenge.
“We are fighting a tough fight against the rates, to get both soybeans and pork in those markets,” Legan said. “In agriculture we always treat uncertainty, whether it is the weather or health of our animals. But this adds a different level of uncertainty that we try to deal with the best possible. “
Lobby groups in the industry quickly criticized the rates. Dekin rates for China, Mexico and Canada run the risk of inviting retribution that can harm the farmers they want to protect, “says Shannon Douglass, president of the California Farm Bureau. GREGG DOUD, Chief Executive of the National Milk Producers Federation, said in a statement on Monday, prior to the new rates, that the group “pushed against trade barriers that arise when countries are in danger of disrupting our dairy sales.”
Although the Canadian government did not specify which products would have been subject to its retribution rates, a plan that was explained last month has selected hundreds of American products that could be the target, including food products such as orange juice and peanut butter. Doug Ford, the Prime Minister of Ontario, said on Tuesday that he had ordered the removal of all drinks made in the US from the alcohol distributor of the State.
Agricultural producers from all sizes, from part -time farmers and small family farms to large, can take a hit as prices fall and some costs rise. Soybeans were good for about half of American agricultural exports to China last year, according to the agricultural department, but American soybeans exporters to China compete with companies from Brazil. The American soybean faiths fell by approximately 1 percent on Tuesday. Futures on our corn and wheat also fell.
“Farmers have planted all their crops, and they already have this year's crop in the ground and they expected a certain price for their product,” said Mr. Kennedy. Now he added: “There is this uncertainty about what the price they will get.”
Many rural communities are already struggling with the abrupt freezing of federal financing of the Trump government on various programs and subsidies. Farmers are forced to borrow money for their machines and are confronted with increasing accounts, said Jill Mcclukey, a professor in the agricultural economy at Washington State University. If they cannot get so much money for their crops because retribution rates make their raw materials less competitive, “they will hurt,” she said.
The effects of rates can be uneven and unpredictable.
Growers of organic products can benefit because they largely sell to the domestic market and use domestic input. But Kate Mendenhall, the executive director of the Organic Farmers Association, said that some of the members of its organization reported higher repair costs for machines because parts come from Canada.
“It will affect unexpected ways that we cannot even appreciate now,” said Mrs. Mendenhall.
The costs of others can also rise. About 85 percent of the Potas, an important ingredient in fertilizer, is imported from Canada, according to the American Farm Bureau Federation.
“Extra rates, together with expected retribution rates, will take a toll in the countryside of America,” said Zippy Duvall, president of the Federation, in a statement on Tuesday. “Adding even more costs and reducing markets for American agricultural products can create an economic burden that some farmers may not be able to tolerate.”
During a profit call last month, Ken Seitz, the Chief Executive of Nutrien, a Canadian fertilizer company and the largest producer of Potas in the world, said American farmers said the rates of the rates. “The American farmer will feel those consequences after the spring planting season,” he said.
This is not the first time that farmers and food producers are in the cruciate hairs of trade wars. During the first term of Mr Trump in the White House, China responded to the rates of his administration on Chinese goods with retaliation rates ranging from 5 to 25 percent on many American agricultural products. According to a research report from the Agriculture Department, those rates reduced the export of American agricultural exports by almost $ 26 billion.
At the time, the export of American soybeans fell to their lowest level in years. In 2018 the soybeans fell to China, the largest market, by 75 percent. A study released last year by the American Soybean Association and the National Corn Growers Association, discovered that a new trade war would immediately drop the corn and soy export with hundreds of millions of tons – a loss in market share that would be difficult for American growers to recover.
During his first term, Mr Trump responded to the targeting of American agriculture by China by providing subsidies to farmers. Whether his administration will do the same this time – and whether those subsidies will be evenly distributed among large farms and smaller producers – remains an open question.
“Farmers want to earn their money with the market,” said Betty Resnick, an economist at the American Farm Bureau Federation. “They don't want to rely on these government subsidies. But at the same time, if we change their market access, they must also stay in business. “
Kevin Draper contributed reporting.
