Farmers could take more blows in latest round of tariff escalation with China

By Jessie Higgins
Farmers could take more blows in latest round of tariff escalation with China
It seems unlikely that the new round of Chinese tariffs will cripple any one commodity. But what they have done is prolong the trade dispute, which could spell ruin for those hard-hit commodities that already have endured nearly a year of depressed prices. Photo by Jessie Higgins/UPI

EVANSVILLE, Ind., May 13 (UPI) -- Although the $60 billion of retaliatory tariffs China announced Monday includes a long list of foods produced in the United States, industry experts say the impact on U.S. agriculture is difficult to predict because many of the most damaging agricultural tariffs are already in place.

China targeted the most vulnerable agricultural industries early in the trade war, hitting soybeans and pork with high tariffs in the spring and summer of 2018.


Those commodities were highly dependent on Chinese markets, meaning the tariffs hit farmers in the Midwest hard, said Ian Sheldon, an agricultural economist at Ohio State University.

Other vulnerable industries, including dairy, wheat and cotton, also were included early.

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The remaining foods now caught up in the latest round of tariff escalation, to go into effect June 1, are exported to China to a much smaller degree.


Peanuts, for example, are among the nearly 2,500 items that will be subject to a 25 percent tariff -- which is a tax paid by importers to the government. But over the last three years, only about 3 percent of the peanuts produced in the U.S. went to China.

"We are not highly dependent on China," said Patrick Archer, the president of the American Peanut Council.

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Chicken and turkey are also included in the new tariffs, but both those items already are banned in China because of a bird flu outbreak in 2015. (That outbreak has since been contained, and the industry had hoped the ban would be lifted in a new trade deal, said Beth Breeding, a spokeswoman for the National Turkey Federation.)

Other foods included in the tariffs are spinach, legumes, beans and lentils; rice, corn and wheat; multiple types of oils; and beef.

"On the beef side, it's mostly a loss of potential business in the future," said Joe Schuele, a spokesman for the U.S. Meat Export Council. "For beef, China is a market that is really in its infancy."

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It seems unlikely these tariffs will cripple any one commodity. But what they have done prolonged the trade dispute, Sheldon said. And that could spell ruin for those hard hit commodities that have already endured nearly a year of depressed prices.


"What this did was make a bad situation even worse for farmers, especially soybean farmers," Sheldon said.

Soy prices fell dramatically after the Chinese tariff hit in July. They were slowly rebounding this spring when it seemed like the two countries were nearing a trade deal.

But that changed suddenly May 5 when negotiations fell apart and President Donald Trump threatened to impose another $200 billion in tariffs on Chinese imports. Soy prices have been falling ever since, and plunged still further with news of China's retaliatory tariffs Monday.

Soy prices have now reached their lowest in more than a decade, and growers fear what will happen if the tariffs remain in place through another harvest.

China had bought roughly 30 percent of all the soy grown in the U.S. Without that market, many tons of unsold beans are still stored on farms across the Midwest with nowhere to go. Another harvest without the Chinese market will see that backlog grow.

"It just compounds itself," said Grant Kimberley, director of market development for the Iowa Soybean Association, who also grows corn and soybeans.

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