American farmers have been hard hit by the ongoing US-China trade spat. Their fortunes could worsen if a deal isn't reached soon.
UNITED NATIONS — President Trump threatened to escalate an ongoing trade battle with China, tweeting Sunday that tariffs on $200 billion in Chinese goods would rise from 10 to 25 percent unless China agreed to a trade deal by Friday.
That threat came as negotiators from both countries reportedly closed in on a deal.
“I think that President Trump has really revealed a pattern.”
Gary Hufbauer is a senior fellow at the Peterson Institute for International Economics and says Trump also threatened tariffs on Mexico days before wrapping up negotiations on a new NAFTA deal.
Citibank analysts even coined a phrase — “Trade war today, trade deal tomorrow” — to describe Trump’s habit of issuing threats just before reaching an agreement.
“I think that’s a fair description, but I would say the chances of a trade war increased dramatically. I would have put them at 20 percent prior to President Trump’s tweet, and now I put them at 40 percent.”
Steve Suppan is the senior policy analyst at the Institute for Agriculture and Trade Policy, and says those odds have American farmers on edge.
“I think it is fair to say that farmers, rather than agribusinesses — especially transnational agribusinesses — are suffering more immediately from the U.S. Trade Representative’s strategy in the Chinese negotiations.”
Suppan says American farmers spent years increasing soy and pork production to meet rising Chinese demand, only for China to place 25 percent retaliatory tariffs on those commodities.
And while some of those farmers received a share of $12 billion in federal “trade mitigation payments” last year, that program is now cancelled and their outlook is uncertain.
“Only the really deep-pocketed farms — where they already have inherited machinery, inherited land — they can survive. If you’re a farmer who’s dependent on renting land and are in debt that you can’t service, you’re in great, great trouble.”