U.S. Farmers Likely To Be Among Hardest Hit By Chinese Tariffs

Apr 4, 2018
Originally published on April 5, 2018 1:31 pm

In response to the Trump administration's threats to place tariffs on $50 billion in Chinese goods, China has threatened to sanction $50 billion in U.S. exports, including airplanes, cars and chemicals. These tariffs would also target some of America's most successful exporters — farmers.

As the sun was coming up Wednesday, farmers at Betty's Truck Stop near Sweet Springs, Mo., took their coffee with a serving of bad news.

"Beans are down 50 cents overnight, and corn's down 14 [cents] because of this trade thing with China," says corn and soybean farmer Jim Bridges. He takes a seat at a large table in the center of the restaurant.

Bridges makes a few calculations and reckons his potential losses are about $50,000.

China has threatened to slap tariffs on some of the biggest U.S. crops: corn, soybeans, wheat, cotton and beef. But, Charles Tuckwiller, sitting next to Bridges in a worn jacket, says it's too early to accurately tally the losses.

"It could have an impact on us. Weather probably plays more of a role than that tariff is going to. We have always survived," says Tuckwiller with a sigh.

The farmers at this table are survivors. They've weathered downturns and massive consolidation in agriculture to become some of the world's most efficient producers. But their survival strategy depends on exports.

"Exports are very important to U.S. agriculture," says David Swenson, an economist at Iowa State University. "We produce significantly more than we can consume here in the United States, and farmers across the United States in all sectors of agriculture depend on exports to maintain price levels."

China has become the largest customer for America's farm products, buying well over $20 billion per year. China bought more than $1 billion in U.S. pork last year. But this week, it threatened a 25 percent tariff on that pork and 15 percent tariffs on a host of farm products grown across a wide swath of the country, including nuts.

Richard Matoian, executive director of American Pistachio Growers, says that 70 percent of U.S. pistachios go into the export market and that more than half of those go straight to China. China also buys a big chunk of the California almond crop, which will be hit hard by tariffs.

"We are generally free traders. We believe in open and free trade," says Matoian.

And that is a conviction shared by many U.S. farmers from coast to coast. Dr. Ron Prestage is a veterinarian in Camden, S.C., but he also runs Prestage Farms, one of the largest pork and poultry producers in the Unites States. Prestage Farms has been expanding, building a new pork packing plant in Iowa, but projected demand for pork has dropped since the tariff fight began.

"Do I enjoy being in the crosshairs and caught in the middle of this dispute?" Prestage asks rhetorically. "[T]he short answer is 'No.' But I understand it."

Prestage says American farmers and pork producers in particular are automatic targets in trade disputes because they are such strong competitors in the world market.

"And that's not by luck," says Prestage. "That's through a lot of hard work."

U.S. farm groups have worked long and hard to chip away at trade barriers, and some worry these tariff fights could upend decades of progress.

"Right now we're in a trade skirmish, but probably not in a war. But the concern is, that skirmish could escalate," says Christopher Hurt, a professor of agricultural economics at Purdue University in Indiana.

And a trade war with China isn't farmers' only worry. If President Trump follows through with threats to walk away from the North American Free Trade Agreement, U.S. farmers could be pinned down in a trade war on two very punishing fronts.

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AUDIE CORNISH, HOST:

We're going to go to rural Missouri now for another view of the tense trade situation between the U.S. and China. Today, China announced possible tariffs on $50 billion worth of U.S. goods. Like actual tariffs imposed earlier this week, the additional ones now being threatened target farmers, some of America's most successful exporters. Frank Morris of member station KCUR has been getting reaction.

(CROSSTALK)

FRANK MORRIS, BYLINE: At dawn this morning, farmers at Betty’s Truck near Sweet Springs, Mo., took their coffee with a side of bad news.

JIM BRIDGES: Beans are down 50 cents overnight, and corn is down 14 because of this trade thing with China.

MORRIS: Corn and soybean farmer Jim Bridges, wearing a pair of brown overalls, quickly reckons his potential losses.

BRIDGES: Oh, we'll see 50 cents, 45 or - about $50,000 of income this year.

MORRIS: China is threatening to slap tariffs on some of the biggest U.S. crops - corn, soybeans, wheat, cotton and beef. But Charles Tuckwillef, sitting next to Bridges in a worn jacket, says it's too early to accurately tally losses.

CHARLES TUCKWILLEF: It could have an impact on us. Weather probably plays more of a role than a tariff is going to.

BRIDGES: Well...

TUCKWILLEF: We have always survived.

MORRIS: While true, these days, most U.S. farmers survive on exports. They produce far more than Americans can use and selling overseas keeps farm prices from collapsing. China bought more than a billion dollars' worth of U.S. pork last year. But this week, it slapped a 25 percent tariff on that pork, and that's being felt here on the farm.

BRENT SANDIGE: We're loading pigs, whatever, to send them to market right here.

MORRIS: Brent Sandige, here in his hog farm in central Missouri, says he'll make less on these animals today than he would have last week. But he supports President Trump, and he likes his aggressive negotiating style.

SANDIGE: You know, sometimes you have some short-term pain for some long-term gain.

MORRIS: The current pain is spread pretty wide. China has already placed 15 percent tariffs on farm products grown across a wide swath of the country, including Fresno, Calif., where Ryan Jacobsen runs the farm bureau.

RYAN JACOBSEN: When we talk about the Chinese market, it's important to recognize that, you know, some of our top exports into there by rank are pistachios, almonds, wine, oranges.

MORRIS: And economically, some California farmers live or die on exports.

RICHARD MATOIAN: Exports represent about 70 percent of our total production.

MORRIS: Richard Matoian with the American Pistachio Growers says that more than half of exported pistachios goes straight to China. China also buys a big chunk of the California almond crop.

MATOIAN: We are generally are free traders. We believe in open and free trade.

MORRIS: And that is something U.S. farmers have in common from coast to coast.

RON PRESTAGE: My name is Dr. Ron Prestage. I'm a veterinarian in Camden, S.C.

MORRIS: Prestage also helps to run one of the country's largest pork and poultry companies.

PRESTAGE: Do I enjoy being in the crosshairs and caught in the middle in this dispute? And the short answer is no, but I do understand it.

MORRIS: Prestage says U.S. farmers are often the first casualties in a trade war precisely because they are such world-class traders. And economist Chris Hurt at Purdue University says that's no accident. U.S. farm groups have worked long and hard to chip away at trade barriers, and these tariff fights could upend decades of progress.

CHRIS HURT: And right now, we're in a trade skirmish but probably not in a war. But the concern is that skirmish could escalate.

MORRIS: And trade war with China isn't the farmers' only worry. American producers sell far more to Canada and Mexico combined than they do to China. And if President Trump follows through with his threats to walk away from NAFTA, U.S. farmers could be pinned down in a trade war on two very punishing fronts. For NPR News, I'm Frank Morris in Kansas City. Transcript provided by NPR, Copyright NPR.

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