(Heartland Newsfeed) — Midwestern farmers may expect to lose billions of dollars this year should the trade war continue to escalate between the United States and China.
The country imposed $50 billion in tariffs on American exports of soybeans and additional agricultural products Friday in retaliation to tariffs imposed in the States on Chinese imports, which was described by President Donald Trump as combating “unfair practices related to the acquisition of American intellectual property and technology.”
The two governments are in a standoff with Midwestern farmers caught in the middle of their crossfire.
A representative of the Iowa Soybean Association
, market development director Grant Kimberley, said, “There are issues related to our trade dealings with China. Trump’s not wrong, but the stakes are pretty high here and we don’t want to be the pawn.”
The high stakes as mentioned exists because China purchases roughly 30 percent of the U.S. national production of soybeans and the proposed tariff at the rate of 25 percent — which comes to billions in taxpayer subsidies to essentially pay the Eastern Asian nation to purchase the commodity — may force Chinese commodity buyers to look elsewhere.
A March 2018 study from Purdue University
estimated that soy exports to China and eastern Asia may drop as much as 65 percent should Trump enact the tariff.
Purdue agricultural economics professor Farzad Taheripour describe that estimation to a “major disaster.”
Taheripour, who conducted the study, stated that if the trade dispute is unresolved by harvest time this fall, the soybean prices will fall considerably, with a potential loss of more than $3 billion in 2018 alone.
“I think I can weather this,” said John Heisdorffer, an Iowa farmer. “I think I can. Farmers are used to markets going up and down, and we try and prepare for the down years. But there is no way to prepare for this. We’re going to lose money on every acre of soybeans.”
Heisdorffer, the president of the American Soybean Association, voiced two major concerns toward two specific demographics: young farmers with not enough money put aside and farmers with land leases who might not earn enough to make their lease payment.
“There will be farmers who lose their rentals,” he said.