Last month, Trump announced new tariffs on 25% of imported steel and aluminum from China and China shot back with a long list of tariffs, that will affect $50 billion of American made products, some directly from the American Farmer. Now, fruits and nuts will be taxed at 15%, pork taxed at 25% (driving American pork to the lowest prices since 2003) soybeans, corn and corn products, wheat, wine, sorghum, cotton, beef and beef products, cranberries, orange juice, and tobacco and tobacco products could be added to this list soon. Neither country has announced when it intends to impose these latest tariffs.
America is the largest exporter of soybeans and China the largest importer. This might put us in a position of negotiating power, but it doesn’t, as Brazil, the second largest soybean exporter, is waiting in the wings to take over our losses should the more recent tariffs go through.
The American Farm Bureau Federation has pressured President Trump to be more reasonable in his negotiations. Farmers are already dealing with a 12-year low income and obviously, a trade war would be a death sentence for many agricultural livelihoods.
A study by the Brookings Institution, shows that as many as 170,000 workers in the corn, soybean and pork industries would be affected by a trade war, and up to a quarter-million workers in specialty industries including wineries and fruit and nut production. Job loss and farm closings could result in devastating results throughout the country.
What does this mean for you, the consumer? Initially, you could see prices drop on agricultural products and an increase in prices on products we are importing from China like clothing, shoes and other goods. Eventually, a lot of farms could go out of business and then, once the market regulates itself again prepare yourself for a spike in prices on things that were cheap during the trade war.