The U.S. hiked tariffs on Chinese imports Friday. Beijing has said it would be forced to counterattack. China could put higher tariffs on a number of U.S. goods including soybeans, whiskey and pork. That has pork farmers worried. (July 6)
As he swings through the Midwest touting a $12-billion relief plan on Thursday, President Donald Trump hopes to plow a new path with some of his most vociferous supporters, farmers, who are feeling the brunt of China’s tariffs.
In seeking an effective way to retaliate for the levies imposed by the Trump Administration, China chose a list of more than 500 products that hit hardest at the farm belt, where the population is relatively thin but politically potent. They include everything from pork to sorghum.
The tariffs affect twice as many jobs in counties won by Trump in the 2016 presidential election as those won by Hillary Clinton according to Mark Muro, senior fellow at the Brookings Institution.
That amounts to about 1 million jobs in potentially impacted industries in Trump counties or 1.9% of employment, compared to roughly 560,000 jobs, or 0.7% of employment in Clinton counties, according to Muro. Among counties with agricultural employment, 2,173 broke for Trump and 444 for Clinton.
The effect of tariffs would not only impose immediate yet long-term economic losses on farmers but ripple through the job market of agriculture-related industries.
“It makes a lot of sense to have targeted retaliation with maximum political impact by going after agricultural states,” Rodney Ludema, former senior international economist in the White House Council of Economic Advisers said. “Unfortunately, I think it is a good strategy.”
Fourteen counties out of Top 15 counties by share of local jobs in impacted industries in 2017 were small rural counties in Republican-leaning states, including Idaho, Texas and Nebraska, according to Muro.
Though agriculture only makes up about 2% of the U.S. economy, Ludema said, “politically, agricultural states punch above their weight because agriculture crosses so many states.”
It’s not that the U.S. has a lock on the world’s soybean crop: Brazil will overtake the United States as the world’s largest soybean producer in 2026, according to a forecast by the new Organization for Economic Cooperation and the United Nations.
Besides soybeans, which Trump has singled out as a crop that needs protection from Chinese tariffs, the levies are impacting pork producers, some of whom enlarged their operations in expectation of more business from NAFTA and the now-failed Trans-Pacific Partnership.
Instead, they now face a shrinking market.
“It would take 100 Argentinian markets to make up what we have lost for the Chinese market,” Ken Maschhoff, former president of National Pork Producers Council.
In Parmer County, Texas, with a population of about 10,000, County Commissioner Steve Cockerham said many of the farmers saw an immediate drop in crop prices when China announced its tariffs. Parmer is the nation’s fifth most exposed county when it comes to China’s tariffs.
“Of course, everybody is concerned because it deals with the livelihood of the producers,” Cockerham said.
However, the biggest employer, a beef packing plant, has not been affected since it takes more time for the tariffs to have any influence on meat production of the big corporations, according to Cockerham.
With Trump now making a play to shore up farm industry support, it’s yet to see how the tariff wars will influence the midterm congressional elections in November.
“If voters start to become concerned about economic growth and start to become concerned there might be layoffs or that prices might rise on the back of these tariffs, then that’s going to have an influence on how incumbents campaign and certainly how far these policies go from the administration,” said Dana Peterson, North America economist at Citigroup.
Other experts think it is not clear how voters are going to react to their economic losses due to the tariffs.
“In the next few weeks and months we’ll begin to see how this ripples through the economy and whether some communities not only see losses but then blame the Trump administration for them,” Muro said. “I’m not certain they will.”
Cockerham, who has a small farm in Parmer County, sees the trade imbalances with China is something that should have been dealt with a long time ago. He said he doesn’t have any problem with the tariffs, per se. Past presidential administrations didn’t deal with trade inequities.
He said he just hates that “the American farmers are the ones who are the ones who got to take it on the chin.”
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