Midwest farmers thank President Donald Trump for his offer of $12 billion to offset the impact of the trade war with China, but some say they need markets to be re-opened.
“We appreciate the aid and support through these times,” said Brad Burbrink, who farms 3,000 acres near Riley with his in-laws. “We’d really like to get the tariff war, or whatever you want to call it, between us and China done and go back to trading.”
Albert Wernz, who grows corn and soybeans in southeastern Clark County, Illinois, said he appreciates Trump’s effort to end longstanding trade inequities with China – even if it means short-term pain for agriculture.
"It’s unfortunate that soybeans is what they buy [more than any other U.S. product],” he said. “The medicine has a pretty bad taste but [by] doing nothing, they’re winners.”
Previous presidents “have not wanted to step up to the plate and rock the boat. They didn’t want to take the heat for it,” Wernz said. “Trump is trying to do something and I think he knows … this war is going to hurt them much more than it’s going to hurt us.”
Trade and open markets are essential to supporting agriculture’s bottom line, Indiana Farm Bureau President Randy Kron said in a statement. He noted farm income has fallen about 50 percent in the past five years and recent drops in corn and soybean prices have compounded the loss to Hoosier farmers, rural communities and the Indiana economy.
“The administration’s announcement of the assistance package is confirmation that our concerns have been heard but there is still work to do,” Kron said. “We will continue to express the importance of reliable trade agreements to Indiana’s representatives in Congress.”
Calling China’s unfair trade practices a national security risk and acknowledging the negative impact on American workers and businesses, U.S. Rep. Larry Bucshon, R-Newburgh, said Wednesday he applauds the Trump administration’s efforts.
“However, I have urged the administration to be laser focused on addressing China’s unfair trading practices and to complete trade deals with our responsible trading partners before harvest in the fall to minimize the negative impacts on our consumers, farmers, and businesses,” Bucshon said.
U.S. Sen. Todd Young, R-Indiana, said he understand what the administration is trying to accomplish, “but Hoosier farmers need fair and accessible export markets, not handouts. I have and will continue to urge the administration to work in close concert with our allies to develop a targeted response to illicit trade practices from bad actors, such as China.”
Economist warns of bailouts
Robert Guell, an economics professor at Indiana State University, predicts other industries will seek compensation.
“The Chinese will react further and more U.S. industries will be harmed,” Guell said. “Those people will come to Trump for help. There is no good end to the road he is on.”
The instinct to protect people “is understandable but foolhardy,” he said. “This is simply more evidence that starting a trade war was a terrible idea.”
For the past 70 years, the GOP has been the party of free trade, Guell said. “When the party had principles, one of them was that markets serve society better than bureaucrats. “This is true without regard to the party or the intentions of the bureaucrats.”
Kevin Christ, associate professor of economics at Rose-Hulman Institute of Technology, is in Germany teaching a course in trade theory to students from Germany, Nigeria and Argentina.
“Most of my students exhibit a better understanding of trade policy than our president and chief trade officer, Peter Navarro,” Christ said. “My students understand the folly of using what is essentially a subsidy to put value on a problem that you created in the first place.”
Christ called Trump’s agricultural price supports ‘a cynical expenditure of public funds designed only to hold on to critical farm votes in the fall election.”
Trump has set the Republican party back 120 years, Christ said, returning it to the days before it was for free trade. He cited the Tariff Act of 1890, which was framed by then-Rep. William McKinley six years before his election as president.
The act was in place for four years before being replaced with legislation lowering tariffs. Americans saw a steep increase in the cost of products as a result and the GOP lost its House majority.
Guell said, “Those of us who understand chess understand that a wise moved is judged to be that only after several more moves by both sides. The president is not a strategic thinker … he reacts.”
Wernz also compared the trade war to a chess game, saying China is “thinking 20 moves ahead how they can win,” but he expressed confidence in the Trump administration.
“I trust our guys in Washington to finally deal with the problem,” he said. “It’s going to maybe put some farmers out of business but I think in the long run it’s the only thing we can do.”