April 11, 2018

Chinese Action after Trade Tariff Threat is Wake-Up Call for Trump-Voting Farmers


In this March 26, 2018 photo, pigs belonging to farmer Jeff Rehder stand in their shed, in Hawarden, Iowa. Rehder stands to lose revenue on his hogs after China responded to Trump’s announced plans to impose tariffs on products including Chinese steel, with a threat to tag U.S. products, including pork, with an equal 25-percent charge. | Nati Harnik / AP


By Dominique Paul Noth / 04.10.2018


In its usual genteel headline fashion, the bluntly left-wing Daily Kos noted: “Trump Flips Farmers the Bird.” That description of what Trump’s trade war would do to the agricultural regions that gave him so much election support had particular resonance in Wisconsin.

Farmers there—who also rely on immigrant labor and were moving away from the president on other issues—know their communities are regarded as central to his 2016 win and were darkly upset at this punch in the gut to America’s bread basket.

Every map printed in various publications on the crop-to-crop impact of the impending Chinese tariffs—15 percent to 25 percent on 106 mainly raw agricultural products—centered on the devastation to the upper Midwest.

No wonder Trump’s economic advisers have been making noises that it is all a feint. Maybe, they suggest, some repositioning is possible with Trump’s blunt tariffs on Chinese steel and aluminum against China’s shrewdly targeted countermoves. Realists are not comforted, considering the shrewd strokes of President Xi Jinping in how to hurt America versus Trump’s wild swings at China, forced to exclude many allied countries such as Canada and the EU from his steel and aluminum tax.

Equally wild was his swing without details on adding $100 billion in tariffs on more Chinese goods. It’s looking more and more like Xi is playing Chinese chess while Trump thinks he’s in a game of Old Maid.

Oh, the price impact on nuts, fruit, and avocado is scary in liberal California, too, and the impact on whisky could drive the entire nation to drink. Corn and wheat fears also reach far and wide.

But let Wisconsin serve as a microcosm of the potential havoc, without even mentioning what a 25 percent tariff would do in Iowa to the pork industry (where China is the third largest buyer and a $1.1 billion trade partner) or what happens to both Iowa and Wisconsin’s soybean crop. In these cases, China can quickly turn to producers in other countries.

Directly crushed is ginseng—hardly a plant Americans munch, but which the Chinese relish for its Wisconsin quality and care. In fact, Wisconsin produces some 90 percent of the American crop. Ginseng is used not only as food but in dietary supplements, pharmaceuticals, and personal care products. All that is a $125 billion market according to business insiders, who also point out that prescription drugs and medical devices require 80 percent of their content from outside the U.S.

Ginseng harvesters tell me the industry has been a hotbed of Trump supporters who are now discomforted at what could happen with a 15 percent tariff, while untouched Canadian producers are grinning with delight.

Pointing out that the tariffs are only threatened at this point, the ginseng association has sounded a huge warning: China is the most important market for the Wisconsin ginseng industry, with over 85 percent of Wisconsin ginseng being exported to China or carried into China as gifts in 2017. This represents more than $30 million in direct annual sales.

An even bigger market—$1 billion and some 4,000 state jobs—is cranberries, and Wisconsin is the world leader. And it had high hopes for the growing Chinese market. There, the Chinese call “cranberries” rubies. “They’re so bright and red—people in China love anything red,” said one farmer, who also told me the people he knew had voted for Trump, thinking his raving populist style would protect farmers.

Terry Humfeld, executive director of the Cranberry Institute, could not discuss pricing details but expressed dismay to me “that cranberries are caught in the middle of an impending trade dispute.”

“China is an important expanding market for U.S. cranberries,” he added, “and tariffs could be detrimental to U.S. cranberry growers.”

In this March 26, 2018 photo, farmer Brad Te Grootenhuis, right, sits with morning crowd regulars at the Boxcars Cafe in Hospers, Iowa. Te Grootenhuis sells about 25,000 hogs a year, and stands to lose hundreds of thousands of dollars in potential revenue after China responded to Trump’s announced plans to impose tariffs on products including Chinese steel, with a threat to tag U.S. products, including pork, with an equal 25-percent charge. | Nati Harnik / AP

There were progressives who welcomed Trump’s steel and aluminum tariffs on China—including some union workers and Ohio Sen. Sherrod Brown, a highly regarded Democrat.  There is almost universal belief among this crowd that steps should be taken against China’s alleged intellectual theft and price undercutting, though many lean to different tactics.

But there is growing evidence—as indicated by Randy Bryce, the ironworker who is one of the Democrats running against Speaker of the House Paul Ryan in Wisconsin—that Trump may be the worst president to try to use tariffs as a bargaining chip.

China’s choices were far more adroit. Many steel and aluminum goods are already made and sitting in the warehouses, and the Chinese don’t import many U.S. cars in any case (one of the issues about the high tariff China already imposes), so there won’t be an immediate price rise in America from Trump’s moves. U.S. manufacturers, not consumers directly, will feel the pain and may decide to later pass the pain along.

But food more immediately hits the consumer. The Chinese tariffs, if not avoided, will soon be felt in urban areas where Trump is held in lower regard. The tariffs could immediately affect the farmers who thought he would protect them, though.

Wisconsin is already turning away from the Republicans, who had already been staggered—witness the 12 percent statewide win of Rebecca Dallet. But many interviewed could not believe Trump would do this to his rural base, and they’re taking the reality of a trade war as a deeper wake-up call.

Worse, if there were a betting pool in Las Vegas on a trade war between President Xi and President Trump, the Chinese dude would be an 8-1 favorite.


Originally published by People’s World under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 United States license.

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