Farmer frustration grows with trade war and ag economy
REDWOOD COUNTY, Minn. — The trade war between the United States and China continues to escalate and as it does there's growing frustration among farmers in the country. The battle has lasted far longer than expected and recently rose to a new level.
President Donald Trump announced the U.S. will be imposing another 10% tariff on $300 billion of Chinese goods on Sept. 1, due in part to the lack of ag purchases made by the Chinese. The president will now delay those tariffs until Dec. 15.
China retaliated by devaluing its currency to 11.5-year lows to the U.S. dollar and asking state-owned companies not to buy any U.S. ag goods.
U.S. Ag Secretary Sonny Perdue was at Farmfest near Redwood Falls to reiterate the president's support of agriculture amid the latest retaliation. "He also understands that farmers have borne a disproportionate share of the retaliatory action of China. That's why he feels compelled to help them survive economically until we can get our trade resolution done."
Perdue announced that another round of Market Facility Payments, known as MFP 2.0, will be made soon.
"We don't like to raise expectations, but I'm a sooner rather than later guy and we hope that we can get done before Labor Day," Perdue says.
However, many sectors of agriculture view the payments as inadequate.
"We're losing more in the marketplace than what we're going to end up by quite a bit (less) than what we're going to end up with these the Market Facilitation Program payments," says Dave Preisler, Minnesota Pork chief executive officer.
As a result, farm groups are growing impatient with the Trump administration's trade strategy. Gary Wertish, Minnesota Farmers Union President says they wanted the president to join with other countries in taking on China to gain more leverage.
"We just don't feel he took the right approach," Wertish says. "The tariffs are just backfiring and you know it's really detrimental to the farm economy."
There are signs that Trump is starting to lose support among farmers. Bob Worth with the Minnesota Soybean Growers Association says farmers are frustrated and there is a growing level of anxiety. "Everybody's nervous," Worth says. "The uncertainty is starting to get to a lot of farmers, not knowing what's the next step going to be, is there going to be another payment?"
Thom Peterson, Minnesota Commissioner of Agriculture says, "I think there is a lot of fatigue out there in trade that I can see it here in the faces of farmers when they looked at today again another announcement from China on soybeans, it's just like oh it's exhausting."
Kevin Paap, Minnesota Farm Bureau president adds, "We want to make sure that he is tough on trade, but he needs to understand that this is having an effect on our bottom line. We've seen our prices down 25% in many cases and we cannot survive where we are."
Some are even predicting if the trade war drags on, it may hurt the president's reelection chances. Tom Haag is a director on the National Corn Growers Association board. He says, "I think he's going to be in the process of losing some support. He's going to have to do something here to get the confidence back to make the people vote for him. The MFP payments help, but that's still not trade."
Meanwhile, U.S. Ambassador to China Terry Branstad says he's not sure if China is stalling until after the 2020 elections. "What I've tried to tell them is this is not going to change because there's a change in party, because both parties are tired of the way that China has handled this situation," he says.
Perdue adds while a meeting is planned in September between the two countries, the president now says the U.S. isn't cutting a deal for now. "They need to change their ways and change their culture of trying to build their economy on the backs of cheating. It needs to end when it's resolved." And that adds to the uncertainty for farmers and their bankers.