American agriculture emerged as a primary target this week as China’s leaders struck back over Trump administration tariffs, escalating a trade spat between the world’s top two economies.
The Chinese government announced Wednesday its plans to impose 25 percent tariffs on select U.S. imports, amounting to $50 billion. If implemented, the Chinese tariffs would distress a range of agricultural producers in the U.S.
Soybeans, corn, beef and pork are among the exports listed under the sanction plan. The news comes one day after the White House released its own list of tariff threats on more than 1,000 imported Chinese products, to protest Beijing’s alleged theft of U.S. technology.
None of the tariffs have gone into effect yet, as the Trump administration still aims to persuade China to lower trade barriers despite the country’s doubled-down response. With the U.S. tariff plan now in phase for further review and public comment, agricultural agencies throughout the state have been quick to rally around the state’s farmers.
The tariffs would have a devastating effect on the 28,000 soybean farmers in the state, said Minnesota Soybean Growers Association President Michael Petefish, who petitioned the White House to restrain from starting a trade war on the backs of American farmers.
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The MSGA released a statement on the morning of the retaliation announcement, urging the Trump administration to reconsider the plan that sparked the imminent trade conflict.
According to the MSGA, China buys around 60 percent of total U.S. soybean exports, accounting for about $14 billion annually. Minnesota nets more than $2 billion annually from soybean exports, with China being the state’s top market
Oak Center farmer Marvin Peters has been farming soybeans, corn and hay for more than 50 years — long enough for him to see how major trade agreements have increased the returns for farmers substantially. Peters said the proposed tariff plan is unlike anything he’s seen before, and would cause a ripple effect in the industry, affecting more than just the crops that China decided to target.
"It would all have a way of backing up," said Peters of the potential consequences to the proposed tariffs. "Because if the market takes a hit, farmers are going to change their cropping plan — which reflects back on the seed companies and the fertilizer industries, and everything down the line."
Peters said the tariff talks won’t affect the way he plants this season because his harvest is already contracted out, but he’s not sure about next year. For farmers who aren’t as fortunate to have a price locked-in, the global dispute is more daunting. For their sake and his own, Peters hopes that an agreement can be made between the countries to save the successful global partnership.
Minnesota Pork Producers Association CEO David Preisler said the tariffs could make U.S. pork products less competitive globally, but he doesn’t foresee market prices in pork to reach new lows. Preisler, who has presided over the MPPA for the last 25 years, said the exchange in tariffs is unlike anything he’s seen before.
"Obviously there have been tariffs in the past that have been put on products," said Preisler of the proposed levies. "But not in this kind of retaliation way."
The American pork industry sent $1.1 billion in products to China last year, with Minnesota being the third-ranked pork-producing state in the country. In 2017, Minnesota’s pork industry sold around 15 million hogs from the nearly 3,000 producers in the state.
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"Anytime we have things that can disrupt exports, yes it’s very concerning," said Preisler, who said the MPPA is still optimistic and looking forward to trade negotiations with other countries.
Preisler said it’s still too early for pork producers to make any kind of big scale adjustments. Unlike the soybean industry, Preisler said that pork producers still have a handful of countries they can rely on for exporting their product.
According to figures from January, the United States exports its largest volume of pork to Mexico, and second-largest to Japan. China is the third-largest market for U.S. pork, ahead of South Korea and Canada.
The Minnesota Farm Bureau released a similar-sounding statement Wednesday afternoon, encouraging the preservation of a market that Minnesota farmers rely on heavily.
"The recent actions by one of our largest trade partners could prove to be detrimental to Minnesota farmers and ranchers," said MFB President Kevin Paap. "The current trade disputes need to be resolved without harming agriculture."
