Wall Street isn’t the only place where President Donald Trump’s tariffs have struck a nerve. Agricultural communities across the U.S. fear escalating trade tensions will increase prices of U.S. goods abroad and harm their business.
Trump announced plans for tariffs on a slew of products from China this week with a value of at least $50 billion, the latest in a string of tariffs the White House has described as key to protecting the U.S. economy. Previous tariffs hit imported aluminum, steel, solar panels and washing machines, raising the prices for domestic consumers and causing the stock market to dip.
But what worries U.S. agriculture is the threat of retaliation that could reduce demand for U.S. agricultural products. China is the greatest U.S. agricultural export market with more than $21 billion in products sent there in 2016, according to data from the U.S. Department of Agriculture.
“I’m very concerned,” says John Heisdorffer, a soybean producer from Iowa and president of the American Soybean Association. “If we lose trade to China, our neighbors to the south will be glad to take up that trade.”
China has so far issued a measured response to Trump’s first move with $3 billion in tariffs of its own on products including wine, fruit and pork. But the specter of more lingers on the horizon. The country has hinted that soybeans — the largest U.S. agricultural export — are a likely next target.
That threat has led to a decline in futures for soy beans, among other products, at a time American farms are already struggling. The USDA projected last month that U.S. farm income is expected to decline nearly 7% this year.
The mess over tariffs — and the threat of a trade war — came the same week as Trump declared on Twitter that the Administration is “delivering” for farmers.