As far back as the 1980’s, Donald Trump has been fascinated with tariffs and China, a country he has long believed is robbing the United States blind. But thirty years ago, private citizen Trump could only talk about them. Today he’s President of the United States and he can do a lot more than that. And he has.
Since taking office, Trump has imposed tariffs---essentially taxes on imports and exports between nations---on goods from Canada, China, the European Union and Mexico, all major trade partners with the United States. Trump has placed tariffs on lumber, steel, aluminum and farm commodities. He has recently relaxed the tariffs placed on Canadian and Mexican goods but has doubled down with China boosting them from 10 percent to 25 percent. He’s also alienated a lot of Americans who see China as a natural and long-term trading partner.
“We don’t disagree with the fact that there are problems,” said Nick Levendofsky, Director of External Affairs for the Colorado-based Rocky Mountain Farmers Union. But the President’s tariffs “just add to the uncertainty in already uncertain times.” China, Levendofsky acknowledged, has not always operated honorably and cited currency manipulation and theft of intellectual property as two examples but said his organization thinks Trump’s approach “has been executed very poorly.”
Colorado agriculture is a $2 billion a year industry. Putting more of what is farmed and grown here on tables in China, including beef, pork, corn and wheat, could swell that number. Tariffs, said Levendofsky, do little for long term optimism and for proof and you don’t have to look far.
The game of tariffs is punch and counterpunch. When Trump ordered $200 billion dollars in tariffs on Chinese goods, the Chinese retaliated by imposing a 25 percent tariff on American imports. China also stopped importing Colorado hides and skins. “They’re for bags and leather goods,” said Levendofsky. That move cost Colorado $89 million.
The whole economic tit-for-tat between the two countries has caused U.S. soybean farmers across the Midwest hearts to sink. Half of the U.S. soybean crop is annually shipped to China. Soybeans are the single biggest farm commodity sold to China; a $14 billion market.
To date, Trump’s tariffs have boomeranged. Tariffs on China’s steel and aluminum have only added to the costs paid by American importers and consumers. A University of Chicago and Federal Reserve study estimated that the new duty on washers and dryers has resulted in an additional $1.5 billion cost to American consumers. A washer now costs an additional $86, a dryer an extra $92. As for the ‘billions’ Trump said would funnel right into the treasury? The study estimated just $82 million dollars wound up there.
Trump’s trade practices are having serious impacts across the landscape. Farm prices are just one variable in this troubling equation. Farming communities---the small towns that depend on spending---are feeling the pain. “Those communities support farmers,” said Levendofsky. “When they’re (farmers) not making money, that town is not making money.” Farmers, he said, are cutting back on buying everything from fertilizer to seed. Some are having trouble paying for their land and for some, “two jobs are becoming a reality,” said Levandofsky. And it goes deeper.
In Colorado’s Kiowa County, a two-hour drive south and east of Denver, there have been four suicides by farmers this year. “It’s terrible,” said Colorado Department of Agriculture Markets Division Director, Tom Lipetzky. “We don’t want to see that happen.” Knowing that things are not turning around soon, the state has established a crisis hotline. “We tell them, ‘hey, it’s OK to reach out for help,’” said Lipetzky. For farmers, like anyone else, “sometimes you just need to talk to somebody, and we’re really focused on helping producers through.”
While Colorado, unlike Illinois and North Dakota, is not soybean country, Colorado farmers are keeping a watchful and wary eye on things. Some farmers are worried that soybean farms may switch to corn or wheat, two Colorado staples. “If we have more producers planting corn instead of soybeans there’s a rippling effect,” said Levendofsky.
Even though farming is an occupation that plays the long game, a lot of farmers are adopting a wait-and-see approach. Others don’t have the time. There have been land sales of generational family farms in Colorado. Others, new and younger farmers, and a few of agricultural veterans have moved into the niche markets, said Lipetzky. “They’ll focus on a couple of restaurants,” selling organic and specialized product. “It adds value to their product.”
To soften the blow farmers are absorbing, Trump has promised billions of dollars in subsidies to them to make up the losses his policies have created. Many farmers are still waiting for the check in the mail. “Some of these dollars have not been paid out,” said Lepetzky, citing the first of the year federal shutdown and simple bureaucratic entanglements as possible explanations. But it’s not a remedy, said Levendofsky. “It’s a band-aid on a bullet wound.”