What Will Happen to Farmers if the Trade Conflict Isn’t Resolved Soon?
In early 2018, the Trump administration imposed a tariff on Chinese-manufactured solar panels and washing machines in an effort to empower manufacturers and businesses here in the United States. To casual observers, this tactic at the time seemed fairly trivial – yet it would turn out to be the first domino to fall in a long series of tariffs, escalating to the full-blown, tit-for-tat style trade war which the U.S and China have recently found themselves to be embroiled in.
In August of 2019, China confirmed that it would be suspending its import of all agricultural commodities originating from the United States. This decision has produced severe and far-reaching consequences for America’s farming community.
As experts in ranch refinancing and ag farm credit, we are familiar with these concerns. The farming community wants to know, what can be expected to happen to farmers if the trade conflict isn’t resolved soon? Before we get to the bottom of that question, let’s explore what the effects of the trade war have been on the U.S farming industry thus far.
How Has the Trade War Affected Farmers in the U.S?
Exceeded only by our Canadian neighbors, China is the second-largest foreign market for U.S agricultural products. Historically, the United States exported huge quantities of commodities like cotton, dairy, wine, wheat, and soybeans. The exports, in turn, supported the industries required to produce those commodities.
The trade war – and the tariffs that are being imposed by China on American agricultural products – threatens to change all of that. Rather than continuing to rely on U.S products, Beijing is now turning to other countries (such as Brazil, with their booming soya industry) for their imported agricultural needs.
What Will Happen if the Trade Conflict Isn’t Resolved Soon?
All of this begs the question: what can we expect for the future as the trade war between China and the U.S continues?
Most farmers are confident that they can rely on receiving some financial assistance from the Trump administration if the costs of production were to become critically severe. Shortly after the August 2019 announcement from Beijing, President Trump made a public promise to provide a bailout package to American farmers in 2020 “if necessary”.
However, if the trade conflict’s aren’t resolved soon, and farmers aren’t given the aid they’ve been promised, the consequences could be dire. For this reason, more and more farmers are turning to farm operating loans and grants to obtain financial reassurance.
Acquire Agricultural Farm Credit Today.
At MSF Agriculture, we’re working with farmers across the country to secure credit, loan, and refinancing services for their property. Contact our office today to find out how you can get started!