Arthur J. Villasanta – Fourth Estate Contributor
Washington, DC, United States (4E) – The American Soybean Association (ASA) representing 21,000 soybean producers is lobbying hard to get Donald Trump to either rescind or reconsider the tariffs he imposed on China, which the latter countered with tariffs of its own, including those on soybeans exported from the U.S.
It told Trump that soybean farmers “rely heavily” on exports to China, and warned of the hurt and pain Trump’s tariffs are inflicting on American soybean farmers.
“Soybeans are the top agriculture export for the United States, and China is the top market for purchasing those exports,” said John Heisdorffer, an Iowa soybean farmer and president of the ASA. “The math is simple. You tax soybean exports at 25 percent, and you have serious damage to U.S. farmers.”
Soybean farmers are among the most hardest hit by Trump’s unwanted and horrific trade war. China’s retaliatory tariffs on hundreds of U.S. goods include top exports such as soybeans, cotton and sorghum. They’re hammering U.S. farmers in states such as Texas and Iowa that backed Trump in the 2016 U.S. election.
For American soybean farmers, the pain they’re enduring is particularly painful. It was American soybean exports in May that slashed the U.S.’ trade deficit to its lowest since October 2016. Now, Trump is repaying the hard work of American soybean farmers by destroying their exports.
More than half of America’s soybean exports go to China, giving China massive influence over the price of soybeans. Trade worries slashed price of American soybeans by 15 percent in recent months.
Ironically, America’s trade gap with China in May rose to $32 billion from $30.8 billion. U.S. exports of goods and services climbed to a record high in May, outpacing a pickup in imports. This will likely not be the case in July.
Trump’s trade war is already damaging his farm, and his state’s broader agricultural economy, said Brent Bible, a farmer who cultivates 5,000 acres of corn and soy in western Indiana. Bible said farmers are now delaying purchases of tractors, grain storage facilities and other items to make ends meet. Trump’s trade war with China has already wiped-out his yearly profit margin of eight percent to 10 percent.
“If we’re not spending money, then other industries aren’t making any money off of us, either,” said Bible.
Economists estimate Trump’s tariffs result in the loss of about 170,000 American jobs and a remove a tenth of a percentage point in Gross Domestic Product growth. Those figures will worsen, perhaps considerably, since Trump has threatened an additional $400 billion in tariffs on Chinese imports and $275 billion in auto imports.
These new taxes will escalate total job losses to 700,000 and remove a half-percentage point of economic growth, likely forcing the U.S. into recession, said Mark Zandi, chief economist of Moody’s Analytics.
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