How the trade war between China and US unfolds is no easy to tell, hurts done will not be undone. Farmers are the first to bear the brunt of retaliatory tariffs on corn, soybeans after Trump administration levied a 25 percent of tariff on $34 billion worth of imports from China.US soybean exports to China is estimated to plummeted as high as 50 per cent, and price soar as much as 5.88%, this means profit will be painfully pinched if these agricultural products are sold at the original price. That is also the case with pork producers and hog farmers, they are suffering from shrinking markets.
Pennsylvania has a booming agricultural industry and plays an important part in the overall development of the state’s economy. Agriculture is heavily export-driven. However, as long as tariffs are slapped, farmers are struggling with selling to the world, and it’s too late to turn around as corns are already on the ground and hogs are grown up.
What complicates and worsens conditions for U.S. farmers is that, on top of the trade dispute with China, the US is also involved in spats with others on many fronts, among others, Canada, Mexico and the EU, say, a 10 per cent of steel and aluminium from the E.U. and Canada, and a 20 per cent tariff on Mexican goods. Canada and Mexico are parties of the North American Free Trade Agreement, buying about 43 percent of all U.S. pork exports. Mexico and China are respectively the largest and second largest export destination. China is also a big customer of US dairy industry, which claims a big part in Pennsylvanian agriculture economy. That said, it’s easy to imagine the blow retaliatory tariffs from these countries and regions can deal.
Pennsylvania plays a key role in Trump’s victory in the presidential run in 2016. When Trump promised to offer an aid package that is valued at $12 billion or so to bail the farmers out of their potential losses, farmers said they are appreciated and would choose to apply for the aid to make it through, but the relief, in the final analysis, is fished out of the pockets of taxers, it’s no constructive and cannot work as a long-term solution. They would rather to feel secure and free to produce and sell, and not stuck in such a human-made mire.
Also Read: US Dairy Industry Hit in Trade War
However, it seems that Trump’s hardness is luring him to press ahead and he directed US Trade Representative Robert Lighthizer to consider jacking up the proposed 10 per cent of tariff on $200 billion worth of Chinese goods to as high as 25 per cent, with targeted item on the list ranging from leather goods, electrical machinery, to seafood. In response to this, when asked for his comment on White House’s latest move, State Councilor and Foreign Minister Wang Yi said in a meeting on Thursday, that actions Trump administration take do no good to eradicate trade imbalance at root. Beijing, while prepared to take necessary countermeasures, is still open to dialogue.