Body blow to the American heartland
Foreign trade partners, including the European Union, Mexico, Canada and China, announced in May that they would begin levying tariffs on billions of dollars of American agricultural products in response to Trump’s new tariffs on steel and aluminum imports.
These taxes make U.S. products less affordable to foreign buyers — who eventually switch providers to avoid the tariffs.
While states that are big exporters stand to take a huge hit, other states that are not could also be affected. If exporting states can’t find overseas markets, they may be forced to try to offload their products stateside, farmers say, leading to a supply glut and price crash that would wipe out profits nationwide.
In interviews, Midwest farmers reveal the impact tariffs have already had, and the ones they fear are around the bend. In Indiana, pork producers say they’ve already been slammed by falling prices, starting when the trade war was just a rumor. In Wisconsin, cheesemakers say their overseas buyers are starting to look for new suppliers in order to avoid the tariffs. In Michigan, apple producers fear the fallout if states that do more exporting are forced to dump their product domestically.
These three states were the highest-producing states in the Midwest for the goods targeted by a recent round of Mexico tariffs and some European tariffs, according to USDA data.
It’s a body blow to heartland states that helped put Trump into office, testing their faith that the president’s brand of trade negotiation will pay off.
Two of the states voted for President Barack Obama in the previous election, and some trade analysts say the tariffs are deliberately designed to target Trump’s agricultural base. In particular, they will affect “purple” states that could flip back to Democratic candidates in the next elections.
Many of the farmers interviewed on their properties voted for Trump. Others may not have voted for him but did not vote for Hillary Clinton, opting to write in third-party candidates or leave that part of the ballot blank.
Despite the pressures, farmers here in the Midwest are holding on in the hope that the president’s tactics will get them a fair trade deal, one in which countries aren’t slapping American goods with high tariffs while being allowed to freely import into our market.
But if the trade war continues into the spring of 2019, the owners of thousands of smaller farms, many handed down from generation to generation, could face tough decisions, pitting their pocketbooks against the president’s policies.
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