Companies and tariffs


MEGAN BASHAM, HOST: Well, coming up next on The World and Everything in It: tariffs and agriculture.

This spring, President Trump started using tariffs to negotiate what he calls fairer deals with U.S. trading partners. First, in April, he announced a 25 percent tariff on imported steel and a ten percent tariff on imported aluminum. That move especially angered China, which hit back with similar measures on U.S. goods.

MARY REICHARD, HOST: Trump responded by threatening new tariffs on Chinese goods if the Chinese government didn’t lower its retaliatory tariffs and address the theft of U.S. intellectual property by Chinese companies. China did not back down, so on July 6th, the Trump administration imposed tariffs on $34 billion worth of Chinese goods. As expected, China responded with its own tariffs—this time on agricultural products.

BASHAM: Those Chinese tariffs have depressed agricultural commodity prices across the board, costing farmers billions. Last week, the Trump administration announced a $12 billion aid package for farmers caught in the trade war crossfire. But as WORLD Radio’s Sarah Schweinsberg found out, farmers say aid isn’t what they want.

SARAH SCHWEINSBERG, REPORTER: Terry Wolters raises about 27,000piglets a year near Pipestone, Minnesota.

WOLTERS: We sell them when they’re about 12 to 13 pounds.

He also grows corn and soybeans, but his hog sales make up a large part of his income. An important part of that income is based on pork exports.

The United States exports 25 to 27 percent of its pork each year. That’s 2.4 million tons of meat. Wolters says those markets add about $62 to the value of each hog sold.

WOLTERS: So because of the tariffs that have been in place, we have been experiencing trouble in moving product into those export markets.

Trouble trading with China has cost pig producers $15 to $20 per head for the last six weeks. That might not sound like a lot, but if prices don’t rebound, it could add up to a half million dollar loss for Wolters.

Dermot Hayes is an agriculture economics professor at Iowa State University. He says other ag products are also in trouble.

HAYES: China is charging duties of 25 percent on soybeans. And so a soybean prices in Iowa have fallen a lot. Before they started, beans were selling at about $10.50. Now they’re at about $8.50. Corn has fallen by about .50 cents a bushel and a pigs have fallen by about $18 per animal. 

Terry Wolters says he appreciates the Trump administration’s $12 billion aid package as an acknowledgement of those losses, but…

WOLTERS: That’s not what we ever asked for. We didn’t want to be given that… given anything for that matter. All we’ve ever really wanted is to try and establish fair trade and free market access.

John Hagenbuch, a soybean farmer in Utica, Illinois, agrees.

HAGENBUCH: I don’t want aid. I’d rather have trade. You know, public perception of, of the farmers getting aid, again, I don’t want that. I would rather have open trade… so… the products can come from China or what  other, ever country to the US and open up those trade barriers.

Many Republican lawmakers are also voicing disapproval of the president’s taxpayer-funded aid package. Senator John Thune of South Dakota calls it a bandaid. He says there are better strategies to address the legitimate concerns.

THUNE: Frankly, if you want to send a message to China, one of the best ways to do that is to start doing business with their competitors. And that would mean those countries in the Pacific Rim in Asia.

Thune says although the Trump administration said it would negotiate bilateral trade agreements with individual Asian nations after pulling out of the Trans-Pacific Partnership,  so far that hasn’t happened.

Terry Wolters says many farmers believe the Trump administration could help them by opening up new markets.

WOLTERS: We have encouraged the administration to develop a bilateral agreement with Japan and definitely have encouraged that process, uh, from the very get go, but unfortunately we haven’t seen anything really develop on that front.

So far both Terry Wolters and Illinois farmer John Hagenbuch say they still support President Trump’s efforts to secure fairer trade with China, but Wolters says farmers can only lose money for so long.

WOLTERS: It’s hurting the families that are involved and at the current rate that the erosion is starting to happen, if this doesn’t correct itself, soon we feel that you’re going to see severe financial ruin within the AG industry in general.

Senator Thune suggests lawmakers may have to act before then.

THUNE: Congress has by statute in the past, relinquished a lot of its powers with respect to trade agreements to the executive branch. And there’s a, there’s a lot of the conversations up here about revisiting that.

Reporting for WORLD Radio, I’m Sarah Schweinsberg.


(AP Photo/Nati Harnik) Soybean plants are seen in a field near Bennington, Neb., Monday, July 30, 2018. 

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.

Like this story?

To hear a lot more like it, subscribe to The World and Everything in It via iTunes, Overcast, Stitcher, or Pocket Casts.

iTunes

Free

Overcast

Free

Stitcher

Free

Pocket Casts

(Requires a fee)


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.