April 26, 2018

Trump’s Tariffs Are Likely To Help, Not Hurt, America’s Long-Term Farm Economy

President Trump is confronting China over its predatory trade practices and outright theft of American property.

China has responded — not by pledging to change its cheating ways, but by imposing politically targeted taxes on American farm exports.

This has farmers rightly concerned they may — repeat, may — get less for their soybeans, sorghum or pork if China goes through with its threats.

But the confrontation with China is not about soybeans, sorghum, are even tariffs.

Sure, farmers aren’t happy when crop prices drop.

But we will be even more unhappy when we’re tenant farmers on land owned by China, buying seed, chemicals and tractors from China, and selling crops to marketing companies owned by China at prices set by China.

And that’s exactly the future China is planning.

You can see the "made in China" future of world agriculture on display today in Brazil, China’s largest supplier of soybeans.

China owns farms, sells the seeds and inputs, buys crops through the Chinese government-owned grain marketer (the world’s third largest, right up there with ADM and Cargill), and stores and ships via warehouses, rail and port facilities it owns.

Rather than simply buying the food it needs on the world market, China is out to reshape the global agricultural commodity trading system, with a strategic goal of “exercising more than market control over global supplies” of key commodities, analysts say. 

The Chinese government bought Syngenta the world’s largest producer of agricultural chemicals, which also sells bio-engineered seeds for the eight crops that account for the majority of global food production.

Cofco, the Chinese government-owned grain marketer, has leaped into the top tier of global trading houses, shoving aside the traditional middlemen to connect farmers directly to Chinese consumers.  Beijing’s purchase of Asian and Dutch trade giants Noble and Nidera helps consolidate its control of all stages of global grain production and trade.

Beijing’s Made in China 2025 plan identifies key industries it seeks to dominate in order to transform China into the world’s top manufacturing superpower. The high tech industries have gotten a lot of attention — these are the areas the Trump administration has targeted with tariffs and investment restrictions — but agricultural machinery is also on China’s list.

President Trump understands that when China controls strategic industries and technologies, it will control the world’s economy — and the future of our nation.

As farmers, we must remember that if China gets to write the rules for global agricultural trade, it won’t be a free market system. It will be a command economy, with price and production targets set by the commanders in the Forbidden City of Beijing.

This administration won’t let China flout all the rules to muscle its way to the top of the world’s economic order.

Beijing’s communist rulers hope they can divide us, pitting American against American, country versus city. But when times are tough you won’t find a more patriotic bunch than farmers.

We’ve been here before. In 1939, as Europe slid into war, American farm exports fell 30 to 40 percent from the already low average of the ten years of the Great Depression that preceded the war. But two years later, farm incomes were higher than they’d been since the crash of ’29. 

Just as we did before when America faced a threat to our way of life, we will stand with President Trump.

It’s about the future of our country and the future of farming.

-- Martha Boneta and Curtis Ellis, Senior Policy Advisors for America First Policies

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