Is there anyone left in South Dakota willing to defend the Trump tariffs?
Even our Republican Congressional delegation has taken the position that Trump’s reckless trade war is doing real, significant, long-term damage to South Dakota agriculture. This claim comes in a letter Senator John Thune, Senator M. Michael Rounds, and Representative Kristi Noem sent to Donald Trump yesterday:
Because of our state’s dependency on agriculture exports, our producers can no longer continue to “wait and see” what happens with U.S. trade in the global arena. Trade uncertainty over just the past few months has cost South Dakota farmers and ranchers hundreds of millions of dollars they could not afford to lose.
…Although you have stated that the agriculture sector will be taken care of through some form of USDA assistance, please keep in mind that U.S. export market share is diminishing daily at an alarming rate, and history has proven that once lost, export markets can take years, even decades to recapture. Given the already difficult market conditions for farmers and ranchers over the past several years, long-term damage to agricultural export opportunities is the last thing the industry needs [Sen. John Thune, Sen. Mike Rounds, and Rep. Kristi Noem, letter to Donald Trump, 2018.07.11].
Experienced commodities trader John Tsitrian pegs the losses for South Dakota soybeaners at $500 million and underlines the long-term damage our members of Congress finally acknowledge:
Agricultural media have been bursting with news about how China, the world’s largest soybean importer, is making it a national policy to build domestic supplies by subsidizing its farmers heavily and seeking new suppliers, including Russia, to replace an American source that has suddenly turned toxic in a geo-political sense. Considering that about half of the U.S.A.’s annual soybean harvest of 4 billion bushelsis exported and that two-thirds of those exports go to China, we’re talking about a serious game-changer here. Even if China’s rapacious demand for soybeans forces the country to take a while before it weans itself away from American supplies altogether, we run the risk of this game of tariff-chicken becoming a catalyst for changes in Chinese buying behavior that in turn creates a new network of suppliers for Americans to compete against. In that scenario, the downward pressure on prices will be persistent and painful [John Tsitrian, “In South Dakota, We’re All Soybean Farmers,” The Constant Commoner, 2018.07.10].
The damage Trump is doing to South Dakota agriculture isn’t fake news. It isn’t bad reading of farm futures data. It isn’t liberal Democratic blogger propaganda. It is economic fact, accepted by experts and an alarmed Republican Congressional delegation.
Update 11:26 CDT: Cobank, a rural cooperative bank and part of the Farm Credit System, says the Trump trade war threatens the global economy and makes it more likely farmers will lose money this year:
…CoBank’s Rural Economic Review says the shift from trade war rhetoric to reality tempers a lot of the optimism in the first quarter of this year. In addition to losing market share in some of the emerging markets, the U.S. may face some historical shakeups in supply chain commitments as customers may look for new trade relationships.
Tanner Ehmke, manager of CoBank’s Knowledge Exchange Division, says trade concerns pose the greatest threat to the projected global economic growth of three to four percent. “The U.S. and China have been driving the economic growth, which benefits emerging markets around the globe,” Ehmke says, “and a trade war between the two is dangerous for economies around the world.” Overall, Ehmke says current market conditions, including rising interest rates, high fuel costs, relatively high land rental rates, and little price relief for other inputs all point to a net farm cash income decline in 2018 [press release via AgNet West, 2018.07.06].