Curt Petrich, president of the Northern Food Grade Soybean Association acknowledges that the global trade imbalance should be managed, but said “there is a better way of addressing our partners than starting a trade war.”
The pain of this tariff war is one-sided according to some agriculture experts and the Chinese will not feel a pricing pinch. Blake Hurst, president of the Missouri Farm Bureau explained the Chinese tariff on soybeans is acting as a pro-Chinese price wedge. “With prices of soybeans depressed because of trade war fears, the 25 percent tariff only raises the price of U.S. soybeans to 2017 levels.
The Chinese are not impacted at all,” said Hurst. “The soybean farmers across the country are the ones feeling the pain. Long-term, this is not good for the farmers.”
What’s more, steel tariffs are raising the price of equipment, adding to farmers’ pain, Wilson said. “There have been comments that the farmers will be taken care of but they are anxious to see what that means. There are fears of bankers calling at the end of the year not renewing lines of credit,” he added.
Senator Heidi Heitkamp (D-N.D.), member of the Agriculture committee who helped pass the bipartisan farm bill four years ago tells CNBC, the timing of these tariffs and the pressure it is having on farmers couldn’t come at a worse time.
“The Farm Bill is set to expire in September and NAFTA renegotiations continue. There is so much uncertainty. North Dakota farmers are rightfully concerned. The United States’ trade war with China, as well as with some of our key allies, is already directly hurting them. We need to use trade enforcement to rein in China’s unfair trade practices, but this isn’t the way to do it. This administration cannot play chicken with our farmers.”
“Given the latest round of tariffs, the soybean processors fear this trade war will be long-term,” said Wilson. “No one is talking to each other and public comments still have to be submitted and heard. It’s going to take a while.”
Correction: This article was updated to accurately reflect when the farm bill was passed.