Farm groups don't support Trump’s tariffs. Why should they? Trade wars stink. Look what happened last time.
If there’s any organized support among ag producers for the Trump tariffs about to be imposed on China, Mexico and Canada, they aren’t to be found in any internet searches I’ve been conducting.
Instead, my searches have been taking me to place after place after place where ag industry spokespeople are unhappy and worried about the prospective tariffs. I note that the ag commodity markets for crops grown in South Dakota and other states that are large soybean and corn producers have been going steadily downward since President Trump announced he’d be imposing tariffs on March 4.
Markets are rattled by the uncertainty, with corn and soybean prices down significantly since mid-February.
There are plenty of unhappy memories of ag markets cratering during Trump’s infamous trade war with China during his first term. China pushed back with retaliatory tariffs. Commodity prices then melted. Farmers were so financially devastated that the Trump administration provided them with billions of dollars of “mitigation” payments in an effort to keep them afloat.
When the three countries — Canada, Mexico and China — Trump is targeting for tariffs retaliate, it will certainly affect farmers in South Dakota. Our state’s ag sales to Canada totaled $666 million in 2023. In 2022, Mexico in received 23% of our state’s total exports while China purchased $1.2 billion worth of grains and oilseeds from South Dakota farmers.
Economist Betty Resnick told the American Farm Bureau last week that “If we do that [impose Trump’s tariffs], Canada’s retaliatory tariffs would also enter into force next Tuesday. Canada has also stated previously that if the tariffs were to remain in effect, they'll impose further tariffs on an additional 125 billion dollars of U.S. products, which could expand to all U.S. agricultural products exported to Canada.”
China has also promised retaliation if tariffs go into effect. Mexico is following suit.
Retaliations by themselves are problematical enough, but more impactful is the likelihood that these countries will begin shopping elsewhere for needed agricultural products. After Trump’s first trade war, China developed sources for corn and soybeans in South America. In 2009, 51% of China’s soybean imports came from the United States. Last year that number had been reduced to less than 25% with South American supplies making up the difference.
As to our trade deficits themselves, I still don’t get the source of Trump’s fixation on them. He somehow interprets deficits as the measure of how our trading partners are taking advantage of us, but he has it wrong. Deficits aren’t nearly the problem that Trump thinks they are. The Cato Institute, which is probably the doyenne of conservative thought in this country, last year studied the subject of deficits. Calling Trump’s take on trade deficits “a fallacious claim,” Cato came up with a piece titled “Ignore the Politicians: Trade Deficits Don’t Really Matter.”
In a reprise of his already proven failure at repairing the non-existent problem of deficits during his first term, the president is determined to inflict pain on the ag industry again while forcing American consumers to pony up the cost of the tariffs by paying more for imported goods.
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam. Republish with permission.
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