President Trump has claimed repeatedly that China pays for the tariffs he has imposed on hundreds of billions of dollars of goods the U.S. imports from its overseas adversary. This is not true. American companies and consumers are directly footing the bill for the taxes, which are only getting worse as Trump continues to try to strong-arm China into complying with his demands to renegotiate what he has described as “unfair” trading practices. Also getting worse are the retaliatory tariffs China continues to place on American imports.
The latest escalation came last week, when China raised tariffs on $60 billion in U.S. goods. The hike was made in response to Trump’s announcement that he plans to raise taxes on $300 billion in products imported from China. Despite the Trump administration’s public optimism, there’s been little sign of progress between Trump and Chinese President Xi Jinping in reaching a deal. Trump has preached patience and patriotism, but Americans are suffering.
American farmers, especially. Soybean prices fell to their lowest price since 2008 last week following the new tariffs from China — the world’s largest soybean buyer. Soybeans are the U.S’s top agricultural export, and the toll on farmers has been so drastic that the Trump administration is reportedly ready to spend up to $20 billion in taxpayer money to bail out the industry. It did so to the tune of $12 billion last fall.
The damaging combination of China buying fewer soybeans and U.S. farmers paying higher tariffs has made for a grim forecast, according to farmers Rolling Stone spoke with about this season’s predictions. “About two out of every three rows of soybeans grown on our farm would be sold to China,” Krista Swanson, a soybean farmer from Oneida, Illinois, told Rolling Stone. “They’re the U.S.’s single largest customer. It’s hard to replace a single large market with a lot of small markets.”
Rolling Stone spoke with five farmers — including Swanson; Worthington, Minnesota, farmer Bill Gordon, whose family farm is coming up on 100 years in operation; Delaware, Ohio, farmer Bret Davis, who says he’s already a month behind his planting schedule because of an unusually wet season; first-generation Illinois farmer Jared Kunkle; and American Soybean Association chairman John Heisdorffer — about how they’re handling all the uncertainty, what they think of Trump, and the damage that’s already been done.
Rolling Stone: From the American farmer’s perspective, how has it been watching this trade war develop with China?
John Heisdorffer (Keota, IA): Well, this kind of news is not only financially draining when the markets go down but it’s also emotionally draining, thinking, “Oh my gosh, this is going to go along again for how long?” I thought we were close to a settlement, but that didn’t happen I guess.
Bill Gordon (Worthington, MN): It’s crazy. You sit there and try to raise a crop and do everything you can. You fight mother nature like we did last year and again this year, and then you come to find out, “Oh, hey, by the way, the government got in the way and you don’t have a market. They took the market away.” Soybean farmers have sunk their own money, blood, sweat and tears for the last 40 years into building the Chinese market up and getting trade partners and building this two-way relationship, then it gets taken away overnight.
Bret Davis (Delaware, OH): I understand what the president is trying to do in bringing them to the table, but we’ve been a year at this and nothing’s happened. We’ve heard from trade representatives that we’re just a couple weeks away and we’ve heard that for months now. With adding more tariffs, I feel like it’s throwing more fuel on the fire. The tariffs haven’t worked and it’s completely crushed our market. We went from a year ago being able to sell beans at this time for $10.30 and we’re at $7.50-$7.60 right now. It’s been a complete detriment to the farmer. And to the rural economy, too.
Even if a trade deal gets worked out, do you feel this has been damaging to future trade relationships with China?
Gordon: Absolutely, we already know it is. They’ve already shifted more of their purchasing power to the South American market.
Krista, many farmers like yourself sell to a local merchandiser who then sells to China. Are you worried the market effects are going to trickle down and start impacting you?
Krista Swanson (Oneida, IL): If you look at the prices, you would say it already is impacting us, the price that we can sell for. It’s a direct factor in our income. China is still buying soybeans [from the U.S.]; that’s an important point to make — but losing even 20 percent of the market there is a really big deal because they’re such a big customer.
The federal government gave farmers a $12 billion aid package last year to make up for the lost sales, and Trump said there’s another bailout coming for you this year. Is that short-term relief enough?
Heisdorffer: It helps, but in the long term we want our exports. We want an open market where we can sell our products. That’s what’s important. We’ve worked 35 to 40 years to get these markets and I’d hate to see it all go down the drain.
Jared Kunkle (Monmouth, Illinois): It was nice to have a year like last year, but at the end of the day we want to produce a commodity and sell it to a market, not for the government to send us a check.
Last year, when these tariffs were first introduced, Trump tweeted out that “tariffs are the greatest!” and has tweeted about imposing tariffs throughout his presidency. Do you think he understands how his trade war is impacting American farmers?
Davis: The president, through business, has been used to a lot of negotiations, but he’s used to negotiating with private companies and individuals. When you go against a whole country, it’s a bit of a different ball game. He thought he could strongarm his way into making them realign themselves. It’s hurt both countries and hasn’t helped anyone. I understand we need this negotiation, but the tariffs aren’t helping either one of us and it’s not keeping people at the table to have this conversation. It’s the same thing with NAFTA with Mexico and Canada.
Markets have dropped when Trump just tweets about imposing more tariffs. How is it knowing your entire livelihood could change the moment Trump sends a tweet?
Gordon: It’s definitely made it interesting, that’s for sure. You never know what’s going to happen anymore — kind of like the weather. “Frustrating” is a good word. You start to lose your patience with anybody in government in general. When the market drops 30 cents on a tweet, it’s frustrating.
How have you viewed his approach to trade? Is it affecting your view of his presidency?
Davis: We get told, “It’ll get done in two weeks.” We’ve heard that so much that we’re losing the support. We’ve sat here quietly as he’s stated we’re supposed to be the ones standing behind him, but you can only do that so long before it hurts your livelihood that you’ve spent generations putting together and you watch it all go away.
Gordon: It’s tough, because it’s not just him. Am I holding him accountable for these tariffs? Yes, absolutely. I’m still up in the air [on whether to vote for Trump in 2020]. It depends who the Democrats run against him.
Heisdorffer: We understand what the president is trying to do, but we don’t think tariffs are the right way of doing it. I just don’t agree with the way he’s doing it.
How have you been coping with having to sit and wait on trade talks?
Heisdorffer: It’s emotionally draining. This goes beyond us farmers. We’re in rural communities, so when we stop buying equipment from our equipment dealers and we use not quite as expensive a seed or don’t use as much fertilizer — all those things go to the community, so the community suffers also. You keep telling yourself it will get better, and hope. That’s about all you can do. We don’t farm all our lifetimes to lay on a beach somewhere. We do this to pass it on to the next generation. The view looks kind of weak right now. We have our corn in, but we don’t have our soybeans in because of the weather. This is my 47th crop I’ve put in since I started farming and we’ve seen our ups and downs, but I’m not sure we’ve had one quite like this. The tariffs have definitely changed things.
Does this make you worried about future generations of farmers?
Gordon: Absolutely. It’s a huge worry for us to try to bridge this financial gap. We lose more money by not planting crops, but we’re still losing money when we do. You can only do that so many times before you’re out of money and you can’t farm anymore, so you have to sell the family farm. We’re at 100 years next year. I’d hate to go to a family reunion in 10 years and say, “We lost the farm after 100 years. We’re not allowed to farm anymore.” It’s tough, and it makes it personal. It really is.