Farm Bureau knocks Trump tariffs
‘Farmers continue to bear the brunt of the trade wars,’ says IFB President Richard Guebert Jr.
By Ted Cox
Illinois farmers are “on the front lines” of President Trump’s trade war and “disappointed” at the escalating tariffs with China, according to a statement issued Friday by the Illinois Farm Bureau.
“The Illinois Farm Bureau is disappointed in the breakdown of the negotiations between China and the U.S. to address long-standing trade issues between the two nations,” said IFB President Richard Guebert Jr. “We are also deeply concerned about the imposition of the retaliatory tariffs that could further impact agriculture.”
Word of those retaliatory tariffs came Monday, with the editor of a Chinese Communist Party newspaper saying that he expects new tariffs on U.S. farm and energy products, according to The New York Times, after trade talks between the two countries broke down last week and Trump instituted new 25 percent tariffs on $200 billion in Chinese imports.
According to the Financial Times, soybean futures on Chicago markets dropped below $8 a bushel Friday to their “lowest level in more than a decade.” That drop continued Monday.
“Tariffs historically have not been good for the farm economy,” Guebert added. “Farmers are on the front lines of this trade war and are sacrificing their livelihoods and it hasn’t gotten better. We are sitting on a huge inventory of grain while our export markets are diminishing.”
He acknowledged that “corn and soybean prices are depressed,” and “combined with a delayed 2019 planting season due to heavy rains … farmers are facing their sixth straight year of declining net farm income.”
According to the Financial Times, soybean exports to China “effectively dried up last autumn” after China hit them with a 25 percent retaliatory tariff in the president’s trade war. The U.S. Department of Agriculture estimated last week that, with exports idled, soybean stocks would double this year to more than 27 million tons and would remain near that level through August 2020 — at an amount four times higher than the average over the last five years.
Trump tried to explain that he’d use the collected tariffs to buy U.S. farm products and then give them away to “starving countries,” but that failed to calm markets, and it should be emphasized that those tariffs will be paid by U.S. importers and consumers.
Illinois Soybean Growers have said all along since Trump initiated the trade war a year ago that farmers “need trade, not aid,” but the IFB said Friday that increased government aid might be necessary.
“Farmers continue to bear the brunt of the trade wars,” Guebert said. “If this trade uncertainty lingers, we will certainly be looking to the Trump administration for another round of market-facilitation payments.”
Politico reported that major U.S. stock markets were down sharply at midday Monday. The Times reported at the end of the trading day Monday: “The American stock benchmark fell 2.4 percent,” particularly felt among firms dealing with agriculture, semiconductors, or industry. Apple, for instance, which has many of its products built at least in part in China and also sells phones there, fell 5 percent, and Boeing, which had plane sales to China threatened, fell 4 percent.