American farmers are finding themselves increasingly caught in the middle of the escalating trade war between the U.S. & China.
This week China announced the cancellation of U.S. agriculture orders in response to President Donald Trump's plan to impose a 10 percent tariff on another $300 billion in Chinese imports.
"It's a very big deal," Patrick Westhoff, director of food and agriculture policy research at the University of Missouri told Cheddar. "It's a lot less market available to producers of soybeans and many other products that are important to U.S. agriculture."
China has historically been one of U.S. farmers' largest buyers, making the sector a prime target for Beijing's retaliatory tariffs.
The new hit comes as agriculture struggles to recover from a yearslong tumble in net farming income, which U.S. farmers saw halved between 2013 and 2016, according to the U.S. Department of Agriculture.
"There are some very severe effects on markets today, and people are probably watching things with a greater degree of concern than might have been the case even a few months ago," explained Westhoff.
Soybeans, which were already dinged by tariffs, have been hit the hardest by the trade dispute. Earlier this year they fell to their lowest prices in more than a decade. "We estimated, for example, that the existing tariffs in place have already reduced soybean prices by something like 9 percent below what they might otherwise have been," said Westhoff. "That's a lot of money."
"Soybeans have already been taxed for more than a year now and suffered the consequences of those tariffs in the form of lowered prices and halted sales to our top export market," said the president of the American Soybean Association, Kentucky farmer Davie Stephens, in a statement to Cheddar. "What this news means for us is that there is no end in sight, where before we were hopeful that negotiations would result in the reopening of our vital China market and prices would stabilize."
The USDA did not respond to Cheddar's request for comment on Wednesday.
"President Trump's strategy of constant escalation and antagonism isn't going to resolve China's unfair trading practices. In fact, it has just made things worse," Roger Johnson, president of the National Farmers Union told Cheddar in a statement. "They can't withstand this kind of pressure much longer.'
President Donald Trump has repeatedly tried to shield farmers from the impact of China's retaliatory tariffs through aid packages distributed by the U.S. Department of Agriculture. In 2018, the Trump administration administered a $12 billion trade assistance package, which faced criticism for delayed payouts.
Earlier this year, another, $16 billion trade assistance package for farmers was announced, though some farmers have said those funds won't necessarily be enough to offset losses the industry faces.
Sentiment among farmers had improved in July from June, according to Purdue University's Center for Commercial Agriculture.
While that survey — completed before this week's news — also found that while farmers were increasingly concerned that the trade dispute will continue through the end of summer, they still expected the tensions to ultimately result in a favorable outcome for the agriculture industry.
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