In the heat of the U.S.-China trade war, neither side has shown sides of relenting. Meanwhile, many American farmers are striving to remain resilient in the face of lower commodity prices and losing business as a result of retaliatory tariffs from one of their biggest sources of revenue — the Chinese.
“It is literally a war,” Trent Loos, a pork and beef farmer, said on Yahoo Finance’s On the Move. “[The Chinese] are right now trying to cheat with international trade policy — or trade agreements — and not implement the strategies [there are] supposed to be, in terms of the WTO as set forth.”
“We need to take a stand now,” Loos added. “The majority of farm and ranch country understands that we have this moment to say: ‘We support the president’ and we want to not cave one bit, to do the right thing. And that’s have free and fair trade with all countries around the world, because their people are in trouble. That’s the missing part of the equation.”
‘Farmers want trade, not aid’
Tensions increased on May 10 when President Donald Trump announced that the U.S. would be implementing 25% tariffs on Chinese goods. Just three days later, China retaliated by stating it would be imposing 25% tariffs on $60 billion of U.S. goods, going into effect on June 1.
And although these tariffs will have a significant impact on the U.S. agriculture industry, Trump is reportedly working with Secretary of Agriculture Sonny Perdue to develop another aid package for American farmers.
But “farmers want trade, not aid,” Loos said, noting that he told Perdue that farmers don’t want a $15 billion aid package. “We want this trade deal to be worked out.”
“There is no amount of money that’s going to overcome the challenges that we’ve had, not only with the tariffs and trade scenarios,” Loos said. “Mother Nature has brought about 2019 like we haven’t seen in anybody’s lifetime. I’ve got farmers, friends in Illinois in the Corn Belt that haven’t planted an acre of corn yet. Those are real issues we need to focus on.”
Loos isn’t the first farmer to raise this issue. Mark Watne, a farm owner and president of the North Dakota Farmers Union, previously detailed to Yahoo Finance some of the struggles that farmers are currently facing. “We’re at levels at nearly every crop where we can’t make any money,” Watne said. “We’re plotting to do our planting here very soon, and we’ll know that we’re seeding a crop that potentially isn’t going to make us any money.”
“The financial challenges … there are people in peril [and] they’re not tied to the Trump trade policies,” Loos said. “It extends way beyond that, it’s much deeper.
“But China has an issue, and they’re posturing right now. They’re implementing the same type of our horrible trade tariffs and trade relations with Canada, particularly with canola, that they’re trying to do here in the U.S.”
‘This is simply posturing’
The U.S. isn’t the only country feeling these effects — Loos speculates that China is suffering as well.
“It’s very multidimensional,” Loos said. “I believe the losses in China — talking to people, veterinarians who’ve been going in and out of China — the losses in their pig population to be upwards of 200 million pigs. [That’s] nearly double what our pig production is on an annual basis. That means they have a shortage of food.”
“That also means … it significantly decreases the demand for the feed stuffs, primarily corn and soybeans grown in the heartland of America,” Loos said. “And so, that’s a result of a disease and a challenge. And I remind you, this is a communist country. We can’t get access to the information that’s truly going to impact their people, let alone our farmers and ranchers.”
On May 16, the USDA released data indicating that China cancelled an order for 3,247 metric tonnes of U.S. pork, which is the largest cancellation in over a year, according to Reuters.
“This is simply posturing,” Loos said. “China doesn’t have the leverage. We can’t cave. We must stay the course. We will continue to endure. It’s our soybean producers and corn producers at this moment that really need to figure out how they’re going to make this work, because it’s really tough to be in the grain business in today’s world.
“People need to eat. We will stay the course and it will work long term. There are going to be bloody battles in the middle. We know that.”