When Donald Trump was on the campaign trail, he ran on a platform saying he would drain the swamp and represent the working class. A large portion of those who were infatuated by those promises were Midwestern and southern farmers. His supporters said he was a good businessman, and he would help with trade and the economy. Today, two years into the Trump administration, we are in the midst of an all-out trade war with China and those hurt by it are none other than those same farmers who believed he would help them in 2016.
Trump has always been vocal about the trade deficit America has with other countries and used this as proof that we have a “bad deal” for trade. He has used tariffs as the main way of trying to negotiate new deals.
However, most economists do not see this trade separation as a bad thing.
Lawrence H. Summers, a Harvard economist, in an interview with the New York Times, said, “The trade deficit is a terrible metric for judging economic policy.” A trade deficit can be argued to be a sign of a good economy because it demonstrates a country’s overall economic stability in that it is wealthy enough to make an abundance of purchases overseas.”
In April, China retaliated to one of the U.S. tariffs by targeting key exports, such as automobiles and soybeans, and the trade war began to escalate. It has now been seven months since the first tariffs were imposed on China and neither side seems to be loosening up.
There has been a great amount of reporting over this issue, and the most outspoken have been Midwestern farmers. In an effort to decipher whether the most reported stories were common or just anecdotal, I contacted local farmers to get their views.
“25 percent of agricultural receipts are exported,” Brad Bailey, director of Barren County Farm Bureau and dairy farmer, said. “Barren County is in the top five of all agricultural commodity produced in the state. So, yes, we too will feel the effects.”
A common thread I found was that the local farmers believed the tariffs were a necessary means to correct a trade deficit.
“Trump and his administration are truly trying to help,” Mac Newberry, retired BCHS teacher and farmer, commented. “He’s trying to balance the trade out.”
Most of the people I talked to believed that China would begin to loosen up and succumb to the U.S. pressure for them to remove tariffs on U.S. imports. However, China continues in recent weeks to release new tariffs on U.S. imported goods.
Criticism of the Trump trade war tactics consistently stems from the idea that the trade war harms small local businesses and consumers rather than correcting trade imbalance. To try and help this problem $12.5 billion have been allocated for emergency funds for the farms that are hit the hardest.
Doug Berry, BCHS agriculture teacher and beef cattle farmer, brought up that “insurance farmers,” farmers who take out insurance on their crops, let their crops fail on purpose just to claim the insurance money. He explained this is very hard for the government to find and could get a large portion of those funds rather than farmers who really need it.
“If the money truly goes to emergency funds, then it’s great, but you’re gonna have people who cheat the system,” Berry said.
Every day more information comes out about the trade war. It seems there are more tariffs and retaliation each time the news is on. Since this trade war is ongoing, we will have to wait to see if Trump’s strategy plays out better than it has thus far.