America’s farmers haveborne the bruntof China’s retaliation in the trade war that President Donald Trump launched in 2018.
The other related reason is more strategic: China hoped inflicting economic costs on U.S. farmers — whovoted overwhelmingly for Trump in 2016— would in turnput pressureon the president to end his trade war.
We conducted our own survey of corn and soybean farmers.Published in October, it suggests three reasons farmers support Trump’s trade policies despite the costs.
Easing the pain
Undoubtedly, China’sretaliatory tariffson almost all U.S. agricultural exports, most notably soybeans, feed grains and pork products, have been painful for farmers.
China bought anywhere from$20 billion to $26 billion worthof U.S. agricultural products a year from 2012 to 2017. Chinese purchases plunged to$9.2 billion in 2018and are on a slightly higher pace so far this year. Soybean exports alonefell 75%from 2017 to 2018.
Over 80% of the 693 Iowa, Illinois and Minnesota farmers we surveyed from February through June said trade disruptions had an adverse effect on their net farm income in 2018. Almost a third reported that their income dropped by over 20%.
But the Trump administration’s efforts to ease their pain have paid off. The administration gave soybean, sorghum and other farmers $12 billion in assistance in 2018, which the vast majority of our survey participants found useful. The survey was conducted before anadditional $16 billionin payments went to farmers this year, both to offset trade losses as well as the effects of too much rain.
We also found that farmers largely view the trade disruption as short-term pain for long-term gain.
While only 14% think their farm operations will be better off financially a year from now, more than half said they expected something good to ultimately come out of the trade war. And about 44% said they believe the U.S. economy will be stronger in three years. China’s 2017 decision to allowimports of U.S. beefand its2020 national ethanol mandatealso give farmers hope for new export opportunities.
In other words, most farmers are prepared to sacrifice income for a while on the belief they’ll make up for it down the road. Since agriculture is a highly cyclical industry, this sanguine view is understandable.
Frustration with China
Finally, we found a growing frustration with China’s erratic buying behavior.
Chinese purchase of products such asdistillers grainsorcornsometimes just disappear. These may have been offshoots of adjustments China made to itscorn support policy, but, from the perspective of U.S. farmers, Chinese demand for certain U.S. agricultural commodities has been annoyingly inconsistent.
Although we didn’t ask survey participants a specific question on this topic, many farmers provided their own unsolicited comments that voiced this frustration.
“The Chinese do not play by the rules,” one Illinois farmer said. “They cancel shipment orders that are not in their favor. They continue to steal our patents. Only President Trump has tried to stop these unfair trade practices.”
Or as a farmer from Minnesota explained: “China imposed the tariffs and refused to buy soybeans in an attempt to hurt our agriculture and get us to turn against a president they do not want. They have been stealing technology and jobs for too long and giving us back inferior goods. Prior to this, they manipulated our markets by buying and then canceling or refusing shipments of grain.”
The possibility of relief
Our survey showed that most farmers recognize that they will continue to be the biggest victims of the U.S.-China trade war and will likely lose markets — some permanently — as Chinadiversifies awayfrom American producers.
As one Illinois farmer who was less supportive of tariffs put it, “we are not the only game in town.” U.S. agricultural exports will face growing competition fromBrazil on soybeansand fromEurope and Australia on meat.
Yet 56% still said they supported imposing tariffs on Chinese products, while only 30% oppose them.
The latest news that China and the U.S. are poised to sign “phase one” of a possible comprehensive trade deal — which involvesChina committing to buy $40 billion to $50 billion worthof U.S. farm products — offers the possibility of relief for farmers. And so, heading into an election year, it will likely bolster support for Trump and his strong-arm trade policies.
Wendong Zhang is an assistant professor of economics at Iowa State University. Lulu Rodriguez is the Global Programs Lead at Iowa State’s Seed Science Center. Shuyang Qu is an assistant professor of agricultural communications, also at Iowa State. This was first published onThe Conversation— “3 reasons Midwest farmers hurt by the U.S.-China trade war still support Trump”.