The trade war with China is only just heating up, and its first victims are the US farmers. Pork and soybean exports have been hit especially hard as a slew of countries (mostly China) have retaliated against US tariffs on foreign goods by hiking duties on US agricultural exports. Trump today call this a direct targeting of China on US farmers.
China is the biggest importer of soybeans in the world, with the bulk of it coming from the US. Last year alone the US sold nearly $12.4 billion worth of soybeans to China – 3/5 of total US soybean exports.
On July 6, China retaliated against US tariffs with a 25% tariff on soybeans, essentially making importers pay the Chinese government 25% of the value of their import. With this hike the importer looks for other cheaper avenues – basically Brazil or Argentina.
This is where President Trump comes in. He and his administration have set up an aid program to help these farmers recoup loses incurred by these tariffs. To the tune of $12 billion. Hopefully this will be a short term problem as US taxpayers are footing the bill for the aid. Ultimately this might turn out for best for the US, as China may ultimately stop taking advantage of US in trade. It is a matter of negotiation and who will bulk first. Time will tell.
Trump tweeted this out earlier today, speaking of ‘China targeting our farmers’:
China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S. They are being vicious in what will be their failed attempt. We were being nice – until now! China made $517 Billion on us last year.
— Donald J. Trump (@realDonaldTrump) July 25, 2018