The Trump regime's trade war with China over crops like soybeans has now reached the point where American farmers have harvested silos full of product rotting away because their biggest buyers in Beijing are looking elsewhere for supply, and there's no reason to believe that Midwest farmers aren't going to continue to be squeezed right out of business.
This is harvest season in the rich farmlands of the eastern Dakotas, the time of year Kevin Karel checks his computer first thing in the morning to see how many of his soybeans Chinese companies have purchased while he was sleeping.
Farmers here in Cass County have prospered over the last two decades by growing more soybeans than any other county in the United States, and by shipping most of those beans across the Pacific Ocean to feed Chinese pigs and chickens.
But this year, the Chinese have all but stopped buying. The largest market for one of America’s largest exports has shut its doors. The Chinese government imposed a tariff on American soybeans in response to the Trump administration’s tariffs on Chinese goods. The latest federal data, through mid-October, shows American soybean sales to China have declined by 94 percent from last year’s harvest.
Mr. Karel, the general manager of the Arthur Companies, which operates six grain elevators in eastern North Dakota, has started to pile one million bushels of soybeans on a clear patch of ground behind some of his grain silos. The big mound of yellowish-white beans, already one of the taller hills in this flat part of the world, will then be covered with tarps.
The hope is that prices will rise before the beans rot.
“We’re sitting on the edge of our seat,” Mr. Karel said.
President Trump sees tariffs as a tool to force changes in America’s economic relationships with China and other major trading partners. His tough approach, he says, will revive American industries like steel and auto manufacturing that have lost ground to foreign rivals. But that is coming at a steep cost for some industries, like farming, that have thrived in the era of globalization by exporting goods to foreign markets.
China and other trading partners hit with the tariffs, including the European Union, have sought to maximize the political impact of their reprisals. The European Union imposed tariffs on bourbon, produced in Kentucky, the home state of the Senate majority leader, Mitch McConnell, and on Harley-Davidson motorcycles, from Wisconsin, the home state of House Speaker Paul Ryan. China's decision to impose tariffs on soybeans squeezes some of Mr. Trump's staunchest supporters across the Midwestern farm belt.
Like most successful American exports, soybeans are produced at high efficiency by a small number of workers using cutting-edge technologies, like tractors connected to satellites so the optimal mix of fertilizers can be spread on each square foot of farmland. The United States exported $26 billion in soybeans last year, and more than half went to China.
Some farmers in North Dakota say they trust Mr. Trump to negotiate in the nation’s interest. Mr. Karel said many of his customers wear red “Make American Great Again” caps and insist that the pain of lost business and lower profits is worthwhile. They say they’ll suffer now so their children benefit later — echoing the argument Mr. Trump has made.
Others are less enthused. Greg Gebeke, who farms 5,000 acres outside Arthur with two of his brothers, said he struggled to understand the administration’s goals.
“I’m trying to follow and figure out who the winners are in this tariff war,” Mr. Gebeke said. “I know who one of the losers are and that’s us. And that’s painful.”
I've got news for farmers like the Gebekes. You're only going to continue to lose. Chinese buyers aren't going to come back. They're going to buy from Brazil, Australia and the EU. Meanwhile, your equipment is only going to become more expensive as steel prices go up. Trump isn't going to win any trade war.
And the rest of us are going to lose too as prices for Chinese imported goods, TVs and microwave ovens and clothes and electronics, well those are going up too, just in time for the holiday shopping season. Our little cold war with Iran will make gas more expensive. And it won't take much to push our consumer economy over the edge into recession again.
If these farmers think it's bad now, give it a year.
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