'We Have Always Survived': China Tariffs Target Top Exports — And The Farmers Who Grow Them
Farmers at Betty’s Truck Stop near Sweet Springs, Missouri, took their coffee with a side of bad news early Wednesday morning.
In response to the Trump administration's threats to place tariffs on $50 billion in Chinese goods — including farm implements — China threatened to sanction $50 billion in U.S. exports, this time targeting airplanes, cars, chemicals and soybeans.
“Beans are down 50 cents overnight, and corn’s down 14 because of this trade thing with China,” Jim Bridges said as he took a seat at a large table in the center of the restaurant. Bridges, who grows corn and soybeans, made a few calculations and reckoned his potential losses at about $50,000.
China has become the largest customer of the United States' farm products, buying well over $20 billion per year, including more than $1 billion in pork last year. Earlier this week, it upped its tariff on pork to 25 percent tariff, plus 15 percent tariffs on ethanol and a host of foods like fruits, nuts and wine.
And China’s newly threatened tariffs target some of the biggest U.S. crops: corn, soybeans, wheat, cotton and beef.
Charles Tuckwiller sat next to Bridges in a worn jacket. He said 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,” Tuckwiller said with a sigh.
The farmers at this table had weathered downturns and massive consolidations, all while becoming some of the world’s most efficient producers. But their survival strategy depends on exports.
“Exports are very important to U.S. agriculture,” Iowa State University economist David Swenson said. “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.”
California exported more than $20 billion in agricultural products in 2016.
“From California's perspective, the big hit is almonds and pistachios, the tree nuts,” said Bruce Babcock, a professor at the University of California, Riverside. “They've had a good growth of exports into China, and China's a really important market for them.”
Seventy percent of U.S. pistachios go into the export market, according to Richard Matoian, executive director of American Pistachio Growers. And that more than half of those go straight to China. China also buys a big chunk of the California almond crop.
“We generally are free traders. We believe in open and free trade,” Matoian said.
That is a conviction shared by U.S. farmers from coast to coast. Ron Prestage, a veterinarian in Camden, South Carolina, runs Prestage Farms, one of the country's largest pork and poultry producers. Prestage Farms is 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?” he asked. “The short answer is no, but I understand it.”
Prestage said American farmers, and pork producers in particular, are automatic targets in trade disputes because they are such strong competitors in the world market.
“In the U.S., the pork industry is somewhat famous for having been very successful at gaining market access around the world for their products. And that's not by luck,” Prestage said. “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 the tariff fights could upend decades of progress.
“Right now, we’re in a trade skirmish, but probably not in a war,” said Christopher Hurt, a professor of agricultural economics at Purdue. “But the concern is, that skirmish could escalate.”
And a trade war with China isn’t farmers only worry. American producers sell far more to Canada and Mexico combined than they do to China. If President Donald Trump follows through with threats to walk away from NAFTA, farmers could be pinned down in trade war on two punishing fronts.
Frank Morris reports for KCUR and NPR. You can find him on Twitter @FrankNewsman.