Donald Trump’s failure to establish a trade deal with China may prove to be his Achilles’ heel. And we’re not talking about bone spurs. Global stock markets react to each day’s news, and stock prices rise and fall. But Trump’s escalating trade war with China is having a long-term negative effect on at least one sector of the U.S. economy, shrinking profits for farmers for nearly a year.
Trump is still trying to pass himself off as the ultimate deal-maker, even though his deal-making chops were exposed as worthless in the New York Times report that he lost $1 billion in business deals over a decade in the 1980s and 1990s. Trump and his administration keep promising that they’re going to get the best deal for Americans “when the time is right,” possibly when Trump meets Chinese President Xi Jinping at the G20 summit in June. Yet ever since Trump started imposing tariffs on imported Chinese goods, and China retaliated in kind, both countries are raising tariffs to higher and higher levels. The U.S. and China are no closer to a trade deal today than they were when Trump first started the tariff war last summer.
How bad is the global situation? Here’s how Vox explained it:
There are signs that things could soon get even worse: The Trump administration is considering upping tariffs on all of China’s remaining imports — about $300 billion worth of products. …
The two countries aren’t close to striking an accord that would see China modify some of its trade laws in exchange for tariff relief from the US. Second, Washington and Beijing could soon have little to no free trade between them — stunting the global economy and increasing prices for consumers and importers in the U.S.
The lack of a China market is hurting U.S. crops, especially soybeans, corn, and wheat. Instead, China has stepped up soybean purchases from Russia, Canada, and especially Brazil. All the while, U.S. soybean prices continue to plummet. Soybean futures have hit the lowest price levels in a decade. Commodities prices for pork and cotton also are spiraling down.
U.S. farmers have borne the brunt of Trump’s failed strategies. There have been a record number of bankruptcies for Midwest farmers—the number of 2018 farm bankruptcies were twice what they were in 2008. Some farmers are able to survive only by taking second jobs. And despite Trump tweets about how “Patriot farmers” are willing to bear the pain so they’ll gain in the long run, those farmers are not happy with Trump right now.
According to a CNN story:
“The president of the United States owes farmers like myself some type of plan of action,” John Wesley Boyd Jr., a soybean farmer in Baskerville, Virginia, told CNN’s Brianna Kellar on Monday.
“Farmers were his base. They helped elect this president … and now he’s turning his back on America’s farmers when we need him the most,” he added. …
John Heisdorffer, an Iowa farmer and chairman of the American Soybean Association, decided to plant about the same amount of corn and soybean this year, figuring a trade deal was near.
“We kept hearing that talks were going well, it sure looked like this was all going to be taken care of soon,” he said. Now, he added, “there’s a lot of uncertainty and a lot of emotions right now for farmers.” …
“Farmers have been patient and willing to let negotiations play out, but with each passing day, patience is wearing thin,” said National Corn Growers Association President Lynn Chrisp in the statement. “Agriculture needs certainty, not more tariffs.”
Most in the GOP are repeating Trumpian talking points that all will be well eventually. But a few Republicans are willing to at least hint at the truth, even if they’re not willing to do anything about it. From a Politico story:
Republicans seem to be relying on Trump’s conservative base in agricultural states to deliver the president a message. Asked who can determine when the economic pain from retaliatory tariffs is too much to stand, South Dakota Sen. Mike Rounds said, “It’s up to the producers.”
“They can’t produce soybeans and actually make a profit today. Five years in a row, farmers’ prices are down 50 percent since 2013. This is a very serious thing, and these are the president’s people. They want him to be successful. But there’s a limit to how long they can hang in there,” Rounds said.
Several pundits argue that Democrats should step up their criticism of Trump’s trade war. Greg Sargent of the Washington Post thinks that Democrats may be missing a big opportunity:
If things continue, Democrats will have a major opening to reframe the trade debate in their favor, by replacing the “free trade versus protectionism” frame with a “reality-based multilateralism versus destructive unilateral America-First-ism” frame.
Well, they won’t get far using that language. But there could be an opening.
A Washington Post-Schar School poll from July 2018 found that only 40 percent of registered voters nationwide thought trading tariffs with China will help U.S. jobs, vs. 56 percent who thought it would hurt.
The trade war is also unpopular in the industrial Midwest: According to the Post polling team, among voters in Pennsylvania, Michigan, Wisconsin, Ohio, and Iowa, those numbers were 39-59.
If Trump’s trade wars continue to harm the country, he’ll be vulnerable to this contrast. …
The public is now seeing the reality of “America First” as a basis for complicated policy decisions in an increasingly interdependent world, and recoiling at it. This isn’t a debate Democrats need to fear.
Figures from Pew Research show that 62% of voters in small towns and rural areas—men and women both—voted for Trump. To keep placating those voters, the Trump administration is promising a $20 billion aid package to farmers, after those same farmers got a $12 billion aid package last year. A total of $32 billion in taxpayer money is a lot of socialism, wouldn’t you say?
Whether any of those farmers splinter away from Trump in 2020 remains to be seen. If the Trump administration is successful in negotiating a beneficial trade deal—a process described as mud wrestling in a hurricane—then they’ll likely stay on Trump’s side. If not, and if more farmers face bankruptcy, they might take the viewpoint of Iowa farmer and 2016 Trump voter Larry Angler, whose farm is facing up to $150,000 in losses. Angler vowed to CNN that he would “never vote for him again.”