Stop us if you’ve heard this one before: A new Nebraska Farm Bureau report issued this week estimates the state’s farmers could lose close to $1 billion, if not more, this year from tariffs.
What’s that? You have heard it before?
Oh, yes – the Nebraska Farm Bureau studied the cost of tariffs on the agriculture industry last December and came up with a similar figure: $700 million to $1 billion.
Numbers don’t lie, and this most recent report only underscores what’s been known for years – tariffs are hazardous to the financial health of Nebraska’s ag sector, which employs one in four Nebraskans.
The state economy suffers when it loses the ease of access to overseas markets, to which it exported nearly $8 billion in goods last year. But the pains reach Nebraska consumers, too, through higher prices on both imported and domestic products of all kinds in today’s global economy.
No matter how tariffs are spun, they’re simply taxes on imports. The resultant costs are ultimately passed down to the end user.
Yet, the United States has continued to use tariffs as a flamethrower to combat China's anti-competitive trade practices when a scalpel would be the more appropriate tool, with the most recent batch targeting China beginning a week ago. Collateral damage from this rash decision brought, unsurprisingly, retaliatory duties from China on American exports.
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Also unsurprisingly, Creighton University economist Ernie Goss wrote that U.S. exports of agricultural goods have fallen by 12.2% since tariffs took effect, leading him to correctly surmise the “U.S. is the first casualty of (this) trade war.”
Rather than buying from American producers as they have in years past, customers in China have instead turned to other nations to fill the void created by this trade war. America’s loss is their gain.
No commodity has been hit harder than soybeans, as the National Oilseed Processors Administration reports China buys nearly 8 times more than the No. 2 market, Mexico. For perspective, Nebraska ranks fifth nationally in terms of exports – $1.5 billion, no trifling figure at the onset of tariffs in 2017 – and production, according to the Nebraska Department of Agriculture.
For as many soybeans as Nebraska farmers plant sell overseas, it pales in comparison to the roughly $2 billion tariffs are estimated to have cost the industry. At a time when commodity prices and net farm incomes – which fell by 64% in the state during a five-year span – are in the basement, avoidable losses are the last thing this state needs to endure.
When farmers and ranchers make less, they spend less – and, as we wrote earlier this year, the impact will “ripple from border to border and have to be made up either with spending cuts or tax increases elsewhere” and be felt by all Nebraskans.
Tariffs continue to be the wrong answer. They were last year, and new data only further confirms it.