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‘All That Is Gone Now’: From Apples To Oranges, America’s Farmers Fear The Worst From Tariffs

"The math is simple."

I don’t know if you’ve heard, but Donald Trump’s tariffs are getting “tremendous reviews.”

China’s Ministry of Commerce, for instance, said the United States has “violated WTO rules and launched the largest trade war in economic history to date.”

That’s about like getting a 0% on Rotten Tomatoes (incidentally, Peter Navarro’s magnum orifice, “Death By China“, got a 33%).

Europe, meanwhile, is scared to death. And so is Canada and so is Mexico. Because up until Friday, everyone was still holding out hope that Trump wouldn’t ultimately go through with the first round of tariffs on Chinese goods.

It’s not so much that slapping duties on $34 billion in Chinese imports is itself a huge deal (the mechanical economic impact of this week’s measures and countermeasures isn’t large). Rather, it’s what that decision seems to suggest about this administration’s cavalier attitude towards global trade and commerce that’s unnerving.

If he’s willing to take it this far, what’s to say he won’t take it even further later this year? What does this mean for the future of NAFTA? And how about the WTO (which, according to Trump, is “always f*&cking” America”)? As a reminder, here’s a potential timeline from Barclays:

Barclays

In the meantime (i.e., in the interim period between now and whenever things get worse), America’s farmers are worried sick.

The day before the tariffs went into effect, we brought you a little something called “‘Man, You Are Messing Up Our Market’: Farmers Furious As ‘Patriotic’ Trade War Threatens Families, Businesses“. There are some choice quotes in there from Ken Maschhoff, chairman of Maschhoff Family Foods and co-owner of the nation’s largest family-owned pork producer, who is afraid that the tit-for-tat trade escalations have the potential to put him clean out of business.

Well speaking of farmers going clean out of business, soybeans were the largest U.S. agricultural export to China in 2017 and when China “went there“, back in April, by threatening to slap duties on them just hours after the USTR published the list of products that would be subject to tariffs as part of the 301 probe, Trump seemed unprepared.

It was a calculated move by Beijing – a gamble that their domestic economy could absorb the higher prices if it meant hitting Trump where it hurt ahead of the midterms.

“China’s response carries both economic and political weight as agricultural states are major supporting regions for Trump,” Monica Tu, an analyst at Shanghai JC Intelligence Co. told Bloomberg at the time.

“We view the inclusion of soybeans in today’s announcement as political in nature and reflective of the escalation of the trade dispute with the US. Soybean tariffs impact US Midwest political swing states and come at a cost that China appears willing to pay,” Goldman’s Damien Courvalin and Jeffrey Currie wrote, in a note out April 4.

Now that what were mere threats have become reality, the soybean issue is back in the limelight and as I mentioned briefly on Thursday, prices have plunged to nine-year lows and farmers are once again sounding the alarm.

In a statement posted on July 6, the American Soybean Association blasted the Trump administration, just like they did in April, when ASA President and Iowa farmer John Heisdorffer issued the following advisory:

It should surprise no one that China immediately retaliated against our most important exports, including soybeans. We have been warning the administration and members of Congress that this would happen since the prospect for tariffs was raised. That unfortunately doesn’t lend any comfort to the hundreds of thousands of soybean farmers who will be affected by these tariffs. This is no longer a hypothetical, and a 25 percent tariff on U.S. soybeans into China will have a devastating effect on every soybean farmer in America.

Fast forward to Friday and, in the new statement alluded to above, Heisdorffer reminds you that this isn’t rocket science.

“Soybeans are the top agriculture export for the United States, and China is the top market for purchasing those exports, so the math is simple”, he said, before clarifying things as follows:

You tax soybean exports at 25-percent, and you have serious damage to U.S. farmers.

Right. And it’s not just soybeans. Here’s what Jaime Castaneda, senior vice president of the US Dairy Export Council told CNN in an e-mail this week:

You have to put all of this into context. Producers have had 3 years of low prices and this fall was looking promising. We were going to get back to profitable margins for the first time in years. All that is gone now.

Hell, even apple farmers are irritated. Just ask Tracy Grondine, a spokesperson for the US Apple Association:

If momentum is lost it will be difficult to regain. What we will likely see happen in the short-term is apples that were destined for export markets will instead overhang the U.S. market. This will impact growers coast to coast.

Oh, and then there was this from the Juice Products Association:

[The tariffs] will have a detrimental impact on the U.S. juice industry and hurt consumers who enjoy quality American juice products.

Any questions?

Now let’s see if Trump decides to take the same approach with the US Apple Association that he took with Harley-Davidson. Maybe he’ll start maligning the #failing apple farmers on Twitter and threatening to tax them out of business for daring to suggest that “America first” is actually hurting domestic industries from automakers to dairy farmers.

Oh, and when it comes to soybeans, CNN wants you to know that out of the 18 states that grow some 96% of America’s soybeans, 17 went for Trump in 2016.

Nothing further.

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5 comments on “‘All That Is Gone Now’: From Apples To Oranges, America’s Farmers Fear The Worst From Tariffs

  1. Well it looks like we will be enjoying cheap apples here in the US. Plowing soybeans back into the soil is a great source of nitrogen, so there’s that. Then too, mebbe congress can come up with a plan to make it mandatory that SNAP recipients can ONLY use soy as a source of protein thus creating whole new industries making soy into something that is only a little disgusting. Actually let ’em eat beans, the slugs! Not to mention that soy oil is a dandy replacement for petroleum oils in paint formulations; got that Sherman-Williams? You see, lots of good can come from this! And if we feel expansive towards our southern friends, Brazil is all rejoice over the 5-balls waverings. “Hello Xi, this Mike Temer, I hear you are interested in some beans….”

    Herr H. likes ‘visuals’ and if you do too, have a look at the beans chart.

  2. Once again we find ourselves in another “rotten” reality show brought to you by the master game playing ego manic that is POTUS. Just a note about this America first thing that should be changed to trump first, last and always. He will throw “anyone” family included under whatever bus he has to and leave the biggest goddamn mess to hold to this power vacuum he has created. He is an evil genius in that regard and doesn’t give a rat ass about any country, person, place or thing other than his demented view of success. “Fuck those farmers” he could care less about “soybeans, Harley’s, apples and the people who need those farms and businesses to survive. They are in the sphere of “his ruinous truth” and are just cannon fodder.

    Vote people vote in every election and tell this horrendous and vile human and his enablers to get lost. This is an historical moment that threatens our whole planet and that is not “crazy” talk, vote.

  3. PaulMiller

    Trump will ultimately win the trade war, and he will only be slightly wounded in the mid terms. He simply pursues the policies that he wishes, and let’s the chips fal where they may.

  4. Christopher Columbus sailed the ocean blue to find a new world – to live free and safe from evil rulers. Ok, skipping ahead a couple hundred years — it seems to have been a good idea because America has certainly achieved freedoms and security and sharing and supporting each other and other countries too along the way! Congrats, very hard work and done well to our success. Certainly worth another fight if necessary!

    Then along comes a vile disgusting evil babyman, weaving his wicked web of deceit and graft and cruelty (to be brief) and some less than desirable American citizens who have their own jealousies and angry temperaments are drawn to him like flies to bullshit. His goal is to take over all control of America and destroy all that has grown since Columbus landed on that rock.

    Well, Pilgrim, (love John Wayne!) I will see you lined up at the voting booths and we can send babyman to Putin for Christmas, departing from Mar-a-Lago!

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