Today is the beginning of President Trump’s much talked about trade war with China. With $34 billion dollars of tariffs already imposed on China and another $16 billion expected in coming weeks, the trade war is shaping up to be as real as its critics feared. As countries retaliate with tariffs and limits on U.S. agricultural products, the biggest losers might be rural America and domestic agriculture — areas often referred to as “Trump Country.” As Trump fired up his base with promises of “Make America Great Again” he is doing the opposite by hurting the very people who supported him.
[China: US is 'firing at the whole world' with tariffs]
China, well aware of where Trump’s support comes from, is punching back at the U.S. where it will hurt — the base that helped put him in the White House. By imposing tariffs on U.S. agricultural products like soybeans, cotton, rice, pork, and produce, Beijing’s strategy is to undercut domestic support for the president.
Already, American agriculture interests have expressed their concerns to Washington. At the end of last month, for example, representatives and senators from Iowa told Trump in a letter that “farmers are facing tight margins and low commodity prices, which makes the latest tariffs catastrophic for Iowa's economy.” This is true across the country.
Trump’s plan to rectify the mess he created will make the situation for farmers, and the country, even worse. In a piece published by USA Today, Sonny Perdue, head of the Department of Agriculture wrote, “The president has instructed me to craft a strategy to support our farmers in the face of retaliatory tariffs. At the U.S. Department of Agriculture, we have tools at our disposal to support farmers faced with losses that might occur due to downturns in commodities markets.” Essentially, Trump wants the Department of Agriculture to use government money to bail out farmers harmed by high taxes.
Although this might a short-term fix, in the long run bailing out agriculture to pay for a trade war ultimately screws up incentives, undercuts the market and sets a precedent for more government spending.
These measures, of course, would be on top of the U.S. tariffs on steel, and other goods, that already raise the cost of necessary farm equipment and cut away at profit margins.
Trump has said again and again that we are losing out because of unfair trade with China and that his tariffs will force China to its knees. Instead the tariffs are unfair to U.S. farmers and, as a result, will hurt the people Trump said he would help.