Donald Trump’s trade war with China is doing neither country any good, as both sides dig in their heels. The stock market is down after China devalued its currency, while tariffs are costing many U.S. businesses, which they pass on to consumers. But the worst news is for farmers, as China has confirmed reports they have stopped purchasing U.S. agricultural products.
China is one of the largest buyers of U.S. agriculture. Bloomberg News reported that Beijing may stop importing them completely in response to new tariffs by the United States. According to reports by Chinese State media, it would also consider slapping tariffs on U.S. agricultural products that it already bought.CNBC, August 5, 2019
Farming produces about 1 percent of U.S. GDP, but the food industry in general accounts for 5 percent. If farms cannot sell their goods to China, one of our largest markets, prices of those goods in the U.S. will rise (or crops will rot in the fields, driving some farmers out of business). That will affect the prices of animal feed, fruits and vegetables, which will in turn affect the prices of everything we put in our grocery cart or eat at restaurants.
China’s move creates a hidden tariff on U.S. agriculture that they aren’t paying. Does Trump think China will starve without American agriculture? I am sure the rest of the world will adjust, even if it means higher prices for China.
I am also sure that Trump will pony up government money to replace the tens of billions of dollars this will cost the farm industry, to
buy the votes increase confidence of the agribusiness community.
The Chinese merely have to wait Trump out, and see if he wins re-election. In the meantime, they’ll turn the screws in every way possible to make it difficult for Americans. You see, they like to win, too. And for the Chinese, time is on their side, unlike American farmers, or President Trump.
I sure hope he wins soon, don’t you?