US Farmers Brace for Long-Term Impact of Escalating Trade War
As farmer Brian Duncan gently brushes his hands over the rolling amber waves of grain in the fields behind his rural Illinois home, this picturesque and idyllic American scene belies the dramatic hardship he currently faces.
“We’re in trouble,” he told VOA.
Wheat is just one product that grows on Duncan’s diverse farm, also home to about 70,000 hogs annually, which Duncan said “were projected to be profitable this year.”
Were, but not anymore.
Pork is now subject to a 62 percent Chinese tariff, and demand is drying up in one of the world’s largest pork markets.
“Once that tariff went on, the pork stopped going into China. Not going to Taiwan, either. Not finding other routes. That market just disappeared,” said Duncan, who expected to see a $4 to $5 profit on each pig, then watched it become a $7 to $8 loss per head.
“The difference between making and losing money in the hog industry is exports,” said Duncan, acknowledging that for most hog farmers, exports are key to profits. A lack of competitive access to international markets could spell long-term financial hardship, particularly for independent pork producers like Duncan.
“The reality is 95 percent of the world population is outside these borders. We need them … as markets and trading partners,” Duncan said.
Tariffs begin to bite
U.S. farmers like Duncan are beginning to feel the effects of such tariffs imposed by China in retaliation for U.S. tariffs on Chinese steel and aluminum.
As the trade dispute continues, Duncan, who also serves as vice president of the Illinois Farm Bureau, is losing money on virtually everything growing on his farm because of imposed or impending tariffs.
“Soybeans were a buck and a half higher than they are now,” he told VOA. “Corn was 50 to 70 cents higher than it is now. So, certainly the attitude has changed here in the last two to three weeks.”
So has Duncan’s mood.
“Frustrated. This was preventable. This was predictable — the outcome. There was a better way to go about this,” he said.
Long-term loss of market
“Tariffs are kind of a last resort for a really specific instance or really serious breach of a contract and not something that you would lob out there to try to make progress in a trade agreement, and I think that’s what surprised farmers a bit,” said Tamara Nelsen, senior director of commodities with the Illinois Farm Bureau.
Nelsen said history shows the long-term impact of tariffs and trade embargoes is a loss of market access and competitiveness for U.S. products.
“In every event, we lost market share, or we encouraged production somewhere else of that same product. And it took U.S. agriculture 20, 30 years to get some of those markets back. And in some cases, we haven’t gotten those markets back.”
For Duncan, the long-term impact on the reputation of U.S. agricultural products is his biggest concern.
“How are we going to be seen? Is a country going to look at us and say, ‘Why would I sign an agreement with them, anyhow? If they don’t like something we do, are they just going to put a bunch of tariffs up and blow things up?’ How are we seen going forward in the next five, 10, 15, 20 years? For me, that is the biggest issue more than the here and now.”
Farm income at risk
But in the here and now is the difficult reality that farmers are also experiencing their fifth year of declining income.
“We’ve seen farm income cut in half in the last four years for various reasons. We could easily see it cut in half again if we lost all our export markets,” which Duncan said could increase dependence on government aid at a time when lawmakers in Washington debate new Farm Bill legislation that the agriculture industry needs to provide security.
All of the uncertainty has him evaluating his options the next time he heads to the ballot box.
“It’s the economy, stupid. My vote will depend an awful lot on the farm economy,” he said. That’s just the world I live in.”
A world that is now more connected — and dependent on international trade — than ever before.