Things got worse for soybean farmers hit by President Donald Trump’s ongoing trade war with China on Friday after soybean futures dropped nearly 40 points on the stock market.
The price drop only added to the overall “devastating” effects that farmers say they’re experiencing since China imposed a 25 percent tariff on soybeans, in response to Trump’s own punitive tarriffs, last month.
“The effect of the trade war has been very devastating on soybean farmers here,” Ohio soybean farmer Chris Gibbs told CNBC Friday. “We’ve taken a 20 percent drop in price,”
Following a U.S. Department of Agriculture prediction of a possible record soybean harvest of more than 4.5 billion bushels for the 2018-19 crop year, soybean futures dropped more than 4.5 percent.
“What we’re seeing with market action here today only exacerbates the fact that we have lost our number one customer because of the trade wars,” Gibbs said.
Soybeans, used for cooking oil and animal feed, among other things, make up about 60 percent of the $20 billion of agricultural exports from the U.S. to China each year, or about 37.5 million metric tons.
Over the past few months, Trump has imposed billions of dollars worth of tariffs on China. He’s also issued tariffs on foreign steel and aluminum, among other products, from Europe, Canada and Mexico. Since the administration’s new tariffs that began in June, corn and soybean crop prices have been on a significant downward decline and several other industries, including New England lobster fishing, have been hit hard.
In June, economists estimated Trump’s tariffs against the major U.S. allies could cost the country 400,000 jobs.
Trump has taken to Twitter to defend his actions. “Tariffs are the greatest!” Trump said last month. “Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the ‘piggy bank’ that’s being robbed. All will be Great!”
Even the president’s $12 billion emergency aid package for farmers, if and when it lands, won’t make up for all the lost revenue the country’s crop growers have endured.
Gibbs said he would need $25,000 of the aid in order to preserve his 560-acre farm, which produces soybeans, corn, and hay, along with raising cattle. Said he has “no idea” if he’ll get that much.
“I can’t see that the taxpayers would fund us in that amount, particularly with a policy where it’s a self-inflicted pain by our own government which drew retaliation from the Chinese and then lowered our prices.”
Although Gibbs voted for Trump because he’s a “can-do guy” and acted like he could “get things done, and that’s true,” what the Ohio farmer did not realize was that he and others like him would be thrown into a battle they never asked for.
“What we didn’t realize was that we were going to be put on the frontlines of this trade war and demonize our number one customer,” Gibbs said. “I’ve got a cracked pelvis just from getting my butt kicked based on these prices.”