Adding up the costs to Nebraska for America’s ongoing trade war requires a trip backward -- before this current game of tariff chicken with China began.
Three days into his presidency, President Donald Trump withdrew the United States from the Trans-Pacific Partnership, which the Nebraska Farm Bureau estimated would have generated $378 million annually in new income for farmers in the state.
In the nearly three years that have elapsed since, that accounts for more than $1 billion in lost revenues.
Meanwhile, the White House’s insistence on placing tariffs — taxes ultimately paid by end consumers — on the state’s largest trade partners invited retaliatory duties largely targeting agriculture. Agreements with Mexico and Canada (which needs congressional approval ASAP), the European Union and several Asian nations, including Japan this week, have removed these barriers to trade, but the U.S. and China have failed to end this brinkmanship.
These pains, of course, are accompanied by a spike in farm bankruptcies that follows years of declining farm income — down 60% from 2013 — along with low commodity prices and high property taxes. Oh, and disastrous winter weather and flooding in 2019 still hinders many farmers.
Despite the estimated $3 billion in foregone revenue, the president’s trade approach has some defenders — in many instances, the farmers who most acutely feel the pain stemming from policies reducing their access to overseas markets. Other countries are happy to fill the void left by the U.S.
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To an extent, we agree.
Cracking down on China’s bad practices, such as intellectual property theft, deserves a hard line from the White House. But instead of placing regional economic pressure on China in an attempt to make it shape up, tariffs have made matters worse at home.
Trump has indeed dropped the hammer on China’s economy. But the methods of the self-proclaimed “Tariff Man” mean it’s also fallen on farmers at a time their business can ill afford these added barriers.
The $28 billion set aside thus far for direct aid to farmers is another cost to Americans, who are paying higher costs for the same goods as a result of tariffs.
Of that figure, nearly 40,000 Nebraska farmers and businesses have received $694 million in subsidies from the federal government to offset their losses within the last 12 months, as the Journal Star’s Chris Dunker reported. That money has helped cushioned the blow – but pales in comparison to what ag producers could make if tariffs were lifted and USMCA were ratified by Congress.
“Does it make farmers whole? No,” Farm Service Agency Administrator Richard Fordyce told him. “But it certainly is a help.”
Trade, not aid, remains the proper way to help a struggling ag industry weighed down by tariffs. Meanwhile, the costs of this method — well into the billions for Nebraska — keep stacking up.