Business

Victory awaits in China trade war, Trump tells farmers

Wednesday, May 15, 2019

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WASHINGTON, United States (AFP) — US farmers who are major exporters of pork and soy are caught in the middle of President Donald Trump's trade wars.

And farmers, along with the industries that support them, are also key voters. So with 18 months to go before the presidential election, Trump is hoping to put them at ease and keep their support.

But as trade barriers continue to bite deeper into an industry that was already suffering low prices and falling income, there are signs of mounting frustration.

“Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now,” Trump said Tuesday on Twitter.

He said he hoped China would “do us the honour” of continuing to buy US farm exports, but even if they do not the Government “will be making up the difference” by buying crops to prop up prices.

The tweets came a day after China announced it was raising tariffs on US$60 billion in US agricultural and manufactured goods, to retaliate for Trump's decision last week to raise tariffs on US$200 billion in Chinese merchandise.

Rural areas are generally more conservative and favourable to Trump, but they have been shaken by the conflict that has brought soy bean exports, to China in particular, to a screeching halt.

And over the last year, they have been targeted not only by China but also the European Union, Canada and Mexico.

For now, while many continue to support Trump, others “are not so sure”, according to Will Rodger, head of communications for the American Farm Bureau Federation.

“We don't have hard numbers that tell us exactly how strong support or opposition may be but our gut feeling is most farmers still support the president since they like many of his policies across the board,” he told AFP in an email.

Sid Ready, a farmer in Scribner, Nebraska, says the trade war has hurt but farmers were hanging in there.

“We understand it and I think farmers are pretty darn resilient,” he said. “In the long run, we hope it works.”

Their patience has limits, Rodger said, as revenues have been falling for six years due to global oversupply.

From a record US$123.4 billion in 2013, farm incomes had fallen by about half as of last year to US$63.1 billion, according to the US Department of Agriculture.

Many farmers in the Midwestern US breadbasket also have been devastated by floods that destroyed crops and prevented planting.

The American Soybean Association (ASA) says it generally supports the Trump Administration's trade objectives, just not the means used to reach them.

WE ALWAYS WIN

Soy farmers are “frustrated” that Chinese and US negotiators have been unable to strike a bargain, and worry their entire business is in danger.

“With depressed prices and unsold stocks expected to double by the 2019 harvest, soybean farmers are not willing to be collateral damage in an endless tariff war,” ASA President Davie Stephens said in a statement Monday.

Many fear their Chinese customers, who once bought about a third of the US soy crop, may soon buy even more from Brazil instead.

The Chinese export market for soy took more than 40 years to develop, and as the trade conflict persists “it will become increasingly difficult to recover”.

Other buyers, like the European Union, may step in to fill the gap left by China. Still, about two thirds of global soy exports are destined for China.

In his Tuesday tweets, Trump said the “massive tariffs” currently in place will pay for government bailouts for suffering farms.

Last week, he suggested the government could purchase the crops and send it as food aid to poor nations.

In July 2018, the government unveiled a US$12-billion bailout fund, and US farmers already receive about US$20 billion in annual assistance through various aid programmes.

And the National Pork Producer's Council (NPCC) said last week it “welcomes the offer of assistance from President Trump”.

“We stand ready to work with the USDA to facilitate US pork exports as food aid to a number of nations,” NPCC President David Herring said in a statement.

Exports now account for 26 per cent of all US pork production, of which a large share is normally shipped to China.

Trump on Tuesday called the US-China trade war a “little squabble”, and predicted ultimate victory.

“We always win. We always win,” he said.


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