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The trade war of President Donald Trump with China makes life more difficult for struggling American farmers.
A total of 84 Upper Midwest farms filed for bankruptcy July 2017 and June 2018, according to the Minneapolis Star Tribune. This is more than double the number of Chapter 12 filings over the same period in 2013 and 2014 in Wisconsin, Minnesota, North Dakota, South Dakota and Montana.
According to economists, corn, soybean, milk and beef farms suffered from weak global demand and low prices. Trump's trade war further aggravates the problem. China has imposed multibillion-dollar tariffs on US agricultural exports in response to Trump's tariffs on Chinese products. Other countries, including Canada, have also added duties on US agricultural products in response to Trump's tariffs on all imported steel and aluminum.
The problem has become so serious that the Trump administration has launched a $ 12 billion aid package for US farmers facing retaliatory tariffs imposed by foreign countries on their products. In September, the government cut $ 25 million rescue checks to the agricultural industry.
But even the bailout might not be enough to keep the farms open. Bankers in the Midwest are worried about too many farmers who are slow to repay their loans.
"We're just waiting for a turnaround," said a Minnesota banker at the Star Tribune. "We are waiting for the tariff problem to disappear."
It does not look like the Trump administration is going to do that anytime soon.
Trump's tariffs on Chinese imports are hurting US companies
Over the last year, the United States has placed about 200 billion dollars tariffs on Chinese products, partly to make Chinese products more expensive so that Americans do not buy them. The administration has also imposed high tariffs on all imported steel, angering other major trading partners of the United States.
The idea was to close the trade deficit and ensure that China buys more US goods, but, as expected, China reacted by applying its own tariffs on US imports. And Trump 's high tariffs on all imported steel and aluminum, which came into effect in March, led other US trading partners to add their own retaliatory rights to the products. American, including dairy products, pork, apples and potatoes.
As Tara Golshan of Vox explains, the impact on the US agricultural sector is not a joke. Prices of agricultural products as soybeans dropped to their lowest level in 10 years since Trump imposed considerable tariffs on Chinese products earlier this year. And farmers in different markets are increasingly worried about the situation of their businesses if the trade war continues.
It was at this point that Trump proposed the idea of a government program to stabilize agriculture in three ways: by providing direct financial badistance to farmers, by buying surplus crops and by handing them over to farmers. food banks and a vague trade promotion program.
The stabilization program will use a program of the era of depression that will allow the government to borrow up to $ 30 billion from the Treasury without Congressional approval. according to the Washington Post. In September, the agriculture department sent farmers $ 25.8 million help. However, even though the bailout is keeping some farms operating, it does not take into account that Trump's trade policies simply do not work.
The trade war has not reduced the trade deficit with China
Trump has repeatedly said that most of his trade policies are aimed at China, which sells more goods to the United States than it buys from the country.
But as Alex Ward of Vox points out, the United States has much more to fear:
Among other indiscretions, Beijing has stolen American secrets of technology and staff for his own benefit, upset the American allies in the South China Sea, killed or imprisoned more than a dozen American informantsand taken millions of American jobs in the last 15 years.
Trump's strategy focused on efforts to cripple the Chinese economy at all costs, regardless of its impact on the US economy. This includes placing tariffs on more than 200 billion dollars last year, which makes Chinese products more expensive – and therefore less appealing – for consumers and American businesses.
But Beijing responded by applying its own tariffs on US products, and the country stopped buying as much from US manufacturers. Thus, the trade imbalance between the two countries is now worse.
In September, the US trade deficit with China hit a new high: $ 34.1 billion. It's a 13 percent increase over last year. FordThe second-largest US auto company said in August that Trump's tariffs cost it $ 1 billion, and that Trump now expects mbadive layoffs. On Monday, GM made a similar announcement.
This impact of Trump's trade policy is striking, given the frequency with which he repeats that his goal is to boost the US manufacturing sector. Its trade war could help the small US steel industry, but it hurts almost every other sector from the US economy. And now, taxpayers are stuck with Trump's bill $ 12 billion rescue.
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