Tariffs Hurt Farmers
Agriculture is now right in the crosshairs as China threatens to put duties on American agricultural commodities like soybeans, corn, and pork.
National Corn Growers Association President Kevin Skoon-ez says farmers depend on trade to make ends meet.
China's response to U.S. tariffs was targeted and aimed at key agricultural products. Tariffs were placed on soybeans, some corn products and pork (among other agricultural items as well as automobiles and aircraft). This move was clearly meant to hit back at not just the U.S. as a whole but the farm economy that largely supported President Donald Trump during the 2016 election. Soybean exports from the U.S. to China totaled $12 billion in 2017, and the loss of any of that business would be harmful for domestic farmers — especially following three generally tight years from a farm income perspective when every bit of foreign demand has been necessary.
Agriculture markets got hammered when the tariffs were announced. Some recovery took place, but the tone of the market has been altered by these tariffs. Trump has threatened another $100 billion of additional tariffs on Chinese goods, directing trade officials to identify potential items to target. Additionally, the potential for some demand to change for corn and vegetable oils due to the Renewable Fuels Standard exemptions or changes also could hit farmers and reduce demand. Uncertainty surrounding political moves continue to drive markets, even as planting of spring crops gets underway.