Farmer in forms walks along the corn with tablet pc in his hands
President Trump has increased US invoices to levels invisible before World War II. While the exact financial impact of these new invoices remain for discussion, a new report warns that they are likely to harm the US farmers.
Trump’s new invoices for steel, aluminum, cars and other goods from countries around the world are expected to increase the average efficient US pricing of the US from below 3% to over 14%. Prices will rise as the immediate impact of invoices work through the economy, but the highest consumer prices will not be the only impact. Employees and businesses will also be affected, both directly due to higher import prices and indirectly through possible retaliation from other countries.
To one reference Published by the US Institute of Business, Joseph W. Glauber determines the possible impact of Trump’s invoices on US farmers. The holdings are scattered throughout America, but some state economies depend more on agriculture than others. In southern Dakota, farmers make up Nearly 6% of the population and 87% of the land of the state is used for agriculture. Large crops include corn, soy and wheat and the state also produces beef and dairy products. North Dakota’s neighbor is also an agricultural force that produces significant amounts of cereals and other crops. Iowa, Nebraska and Montana complete the first five states with the highest percentage of farmers. These are the states that are most likely to feel the pain of invoices that affect farmers.
According to Glauber, 58% of agricultural imports will face 10% or more invoices in the context of Trump’s current tariff plan. About 14% of imports will face 20% or more invoices. More than 80% of agrochemical imports and 70% of agricultural machinery imports come from countries with 10% or more invoices. It will be difficult for farmers to find other suppliers to avoid invoices, given the high concentration of imports from high teacher countries. Other agricultural imports, such as spices, nuts and olive seeds, also come mainly from countries facing high invoices, as shown in the table below.
Share of imports from high teacher countries
The immediate impact of these invoices will be higher prices for US farmers and consumers, but there is another threat – the irritating invoices received from other countries. US farmers are important exporters and if other countries apply invoices to deal with US invoices, they will harm farmers’ sales. Glauber notes that markets highly exposed to retaliation invoices include olive seeds. animals and animal products; and granules and feed.
Invoices can also reform out markets. Glauber highlights the example of soy, America second larger Cultivation after corn. In his first term, President Trump imposed invoices on China and China opposed With invoices in our soybeans. Prior to invoices, Brazil and the United States each provided about 40% to 45% of Chinese soy imports. After the invoices, the Chinese importers shifted their business away from the United States in Brazil. US soy exporters have not yet regained their market share in China and today Brazil supplies about 70% of Chinese soy imports, while America provides 20%. The current Trump invoices could have a similar effect on other markets, such as beef or corn, if implemented and imposed strictly. Such shifts would hurt our farmers, even if the invoices are eventually canceled.
China’s soy imports
These invoices may look as if they were mostly problem for farmers, but the impact of policies tend to spread beyond those that are directly affected. During Trump’s first trade race with China from 2018 to 2020, the US government increased the income from invoices over $ 65 billion from China’s invoices, to a large extent paid From us importers and consumers. At the same time, Trump was authorized $ 61 billion In relief payments to American farmers who are hit by China invoices. In other words, Trump’s administration carries basic money from US consumers and importers who paid higher prices for Chinese goods to farmers. The use of taxpayers’ dollars to calm farmers can be good policy, but it also shows that people who believe that they are not affected by a particular policy may be affected by the narrower inspection.
There is still significant uncertainty about the goals of Trump’s commercial policy. It has temporarily suspended the highest invoices in most countries to provide time to negotiate trade agreements. His administration had discussion With India, Japan and Italy, but no agreements have been announced. Meanwhile, several countries have unilaterally proposed to reduce their invoices to US imports to try to determine Trump. If the highest and wider invoices are avoided, US farmers will probably be able to handle the effects only with moderate discomfort. But if invoices 20%, 30% or more remain in force for several years and are accompanied by anti -sized invoices of similar size, farmers – and the rest of America – will face significant financial difficulties.
