Farmers across the country are bearing the burden of the tariffs put in place by President Donald Trump. This week at a congressional hearing, some of them shared concerns about the president’s trade tactics including the possibility for shrinking export markets, rising costs and bankers making lending more difficult.
“I am hearing more from farmers as time goes along that they still trust that President Trump knows what he’s doing, and everything will be fine in the end. We understand that other countries, particularly China, have not played fairly, and we respect his desire to remedy those situations,” said Scott VanderWal, a South Dakota farmer and vice president of the American Farm Bureau Federation.
Still, VanderWal explained his fear that the countries the U.S. is having trade disputes with know how to “punch back” by targeting agriculture products, which is what they have done. According to VanderWal, soybeans have lost 20% of their value since May.
“If sales have to be made at these price levels, this whole thing will show up as a massive shortfall on our financial statements,” he said.
Not only has farm income declined 52% since 2013, making it more difficult for farmers to repay loans, but the trade tit for tat has introduced another level of uncertainty for bankers who lend to farmers and ranchers, according to VanderWal.
“Farmers and ranchers are some of the most patriotic Americans, but going bankrupt should not be a consequence of that dedication,” he said.
According to Pro Farmer policy analyst Jim Wiesemeyer, Rep. Tom Rice (R-S.C.) thinks Congress should not interfere with the president's efforts to balance the trade equation for all U.S. exporters. He said countries who have taken advantage of the U.S. will not change without pressure to do so.
“We can disagree about the kind of pressure [used]. The pressure here is the tariffs. You guys are in the cross hairs, and nobody wants you in the cross hairs,” Rice told the farmer witnesses, adding there should be “amelioration” for farmers to reduce the financial pain.
Similarly, Rep. Jason Smith (R-Mo.) said that as a rancher he understands agriculture’s vulnerability, but that he applauds Trump’s approach, according to Wiesemeyer. Secretary of Agriculture Sonny Perdue also said he supports President Trump’s trade tactics this week.
“Tariffs are not the ultimate answer,” Perdue told the Washington International Trade Association (WITA), referring to Trump’s use of trade remedy laws to impose tariffs on trading partners. “But they are a tool to get people’s attention, so we can get the players on both teams playing by the same rules.”
For Montana farmer Michelle Erickson-Jones, president of the Montana Grain Growers Association, the tariffs have not only hurt the price she is paid for grains but they have increased the cost of buying a 25,000-bushel grain storage bin. According to Erickson-Jones, the cost of a new bin this year was 12% higher than it was when she bought one in 2017. The prices have since gone up another 8% because of the steel tariffs, she said. She did not purchase a new bin.
“A small local construction company lost a project, a U.S. grain bin company missed a sale, and a domestic steel company had one less shipment to send out of their factory,” she said.