Putting a dollar figure on the damage tariff talk has done to Nebraska provides important perspective.
A report issued by the Nebraska Farm Bureau last week placed the cost of this tough talk at $200 million in 2017, with corn and soybeans seeing the steepest drop. And that’s before the first tariffs even took effect, with a separate study finding tariffs lost Nebraska nearly $1 billion in farm income in 2018.
This disastrous approach has only ramped up since; the latest developments see the United States and China doubling down on their trade war. Given that producers in Nebraska’s leading industry face many existential struggles – plummeting commodity prices, natural disasters, farm income halved since 2013, falling land values and near-record bankruptcies – the state will acutely feel the escalation of such harmful policy.
Nebraska is the nation’s fifth-largest ag exporter, and 30% of its farm and ranch production is exported. Accordingly, these decisions related to overseas market access matter immensely to our state’s economy.
Yes, these tariffs are largely being paid by all American consumers. But producers – especially farmers – are feeling the pain most acutely.
Cracking down on China is the right move to combat intellectual property theft, state subsidies that undercut American businesses and the country’s demand for trade secrets to enter its marketplace. Unfortunately, the White House chose the most destructive path in pursuit of a good goal.
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Beginning what the New York Times called a “process to impose levies on nearly every product China exports to the United States” has led China to declare retaliatory duties. Instead of turning to tariffs, which are taxes ultimately paid by Americans through the higher cost of goods, the Trump administration should have used market pressure.
The Trans-Pacific Partnership, for instance, would have brought many Asian and Pacific nations closer to the U.S. at the expense of Chinese influence. U.S. withdrawal had the opposite effect – and deprived Nebraska’s ag industry of an anticipated $378 million in annual farm receipts alone, according to the Nebraska Farm Bureau.
This clear and present – not to mention growing – danger is precisely why the Journal Star editorial board prioritized “protecting the farm economy” in its 2019 agenda. The ripple effect, as we’ve written before, won’t be confined to rural areas, either; decreasing farm incomes will create corresponding decreases in tax receipts at both the local and state levels.
The new Farm Bureau report notes that the livestock industry, which had mostly been insulated from tariffs, reported growth in exports in 2017. It’s amazing what happens when government gets out of the way – and out of the business of picking winners and losers.
With the damage of this strategy coming into sharper focus, all Nebraskans must fight for smarter trade policy.