By Ron McMullen, The Press Citizen
Iowa is on the front lines of the Trump administration’s burgeoning trade wars. What’s at stake? Last year Iowa sold agricultural products, advanced manufactured products, and other goods worth over $13.3 billion to international buyers. Canada, Mexico, Japan, and China were our largest customers.
After the U.S. imposed tariffs on steel from Canada and Mexico earlier this year, both countries slapped steep tariffs on American pork, causing exports and prices to slump--bad news for Iowa farmers. Even with expected help from the renegotiated NAFTA agreement (“USMCA”), Iowa farmers will suffer until the Mexican and Canadian tariffs are lifted.
The main theater of the trade war is China. The administration accuses China of unfair and illegal economic practices and imposed tariffs on $250 billion worth of Chinese imports. China has virtually stopped buying American soybeans and is shopping in Brazil. That action, combined with a bumper 2018 harvest, has driven soybean prices below the break-even point for many farmers. The administration promised $12 billion to farms harmed by the trade wars, but that’s a band-aid, not a solution.