Trump Trading Blows, Con't

There are signs that the one-two punch of Donald Trump's tax cuts for the rich and igniting a global trade war is starting to hurt the US economy.  Unemployment is down, but so are hourly wages.  Fed chair Jerome Powell raised core interest rates last week to head off inflationary pressures as gas price hikes have eaten up wage gains for Americans since Trump took office, with oil prices jumping substantially after Trump wrecked the Iran nuclear deal.  And in the heartland, a new round of tariffs on China announced last week will only make things worse for US farmers.

Perhaps Iowa farmers' biggest fear is becoming a harsh reality: The escalating U.S.-China trade dispute erupted Friday, with each country vowing to levy 25 percent tariffs on $50 billion in goods.

U.S. and Iowa agriculture is caught in the crossfire, with farmers selling $14 billion in soybeans to China last year, its top export market.

Soybeans are among hundreds of U.S. products China has singled out for tariffs. The U.S. has an equally long list that includes taxing X-ray machines and other Chinese goods.

Iowa farmers could lose up to $624 million, depending on how long the tariffs are in place and the speed producers can find new markets for their soybeans, said Chad Hart, an Iowa State University economist.

U.S. soybean prices have fallen about 12 percent since March, when the U.S.-China trade dispute began.

"Any tariff or tax put in place will have a significant impact, not only to the U.S. soybean market but to Iowa's, because we're such a large producer," Hart said Friday.

Iowa is the nation's second-largest soybean grower, producing 562 million bushels last year worth $5.2 billion.

Iowa is number two.  The number one soybean producer is Ohio.   Farmers around here have noticed, too.  They're worried.  And Iowa has bigger problems too.

China already has smacked farmers with an additional 25 percent tariff on pork, and Mexico plans a 20 percent tariff on ham and pork shoulders.

Those moves could cost Iowa pork producers $360 million over the year, an ISU economist estimates, less than initially calculated, thanks to some pork price recovery.

Mexico is weighing tariffs on $4 billion of U.S. corn and soybeans, Reuters reported Friday, while the European Union and Canada are considering tariffs on a range of U.S. products.

Iowa stands to lose a billion dollars a year from tariffs on soybeans and pork.  If tariffs extend into corn too, Iowa's farm economy will be badly damaged.  That's just one state, too.

Then we have to talk about how food is going to get a lot more expensive in the US as a result of these tariffs, so even if you're not a farmer, you'll notice at the grocery store for sure.  It's going to get worse before it gets better, too.