Farmers on China Tariffs: ‘This Isn’t Just a Chess Match’ | WSJ

When the farmer struggles, they’re not going down
and buying a new vehicle. We’re not making that purchase. And it hurts your small mom-and-pop shops, the equipment dealerships, and then that continues to be broaden. And it just continues to ripple
out and the impact trickles through other industries and economies throughout the community and state. – [Jason] American farmers are suffering. They’re caught in the
middle of a trade war between the US and China. I think they very much wanna make a deal, and the longer they wait, the
harder it is to put it back. If it can be put back at all. From 2017 to 2018, Chinese
imports of soy beans, pork, milk, and other products dropped by more than $10 billion. In the first half of this year, they’ve dropped another 20%
from the same time in 2018. We went to the Farm Progress
Show in Decatur, Illinois, where we spoke with a range of
farmers affected by tariffs. They represent some of the industries that have felt the most impact:
pork, corn, soy, and dairy. Raise your hands if you
expect your business to be profitable this year. Larry, you’re in one of the
toughest areas right now, dairy. How is it you’re profitable
when things are so difficult? He’s wicked smart. (farmers laugh) We’re diversified. We’re diversified in both the grains and in hogs and beef yet too. So while we may be loosing,
I know the numbers, but several tens of thousands of dollars on the dairy side of it, we’re making it up on our
hog side of it yet too as a contract finisher. And because we have maintained a very low debt-to-asset ratio and we are very prudent
as to what we invest in. I think there’s a general awareness that this is not the easiest time to be a farmer in this country. So for you, what is your
pain point at the moment? I think a big pain point
would just be uncertainty. We have a lot of trade deals that have kind of been opened up here and we have some major
uncertainties with trade. And farmers came through
a really challenging growing season here. We’ve lost a lot of dairy farms. In my county alone, we’ve
lost two close neighbors that basically just threw
in the towel and said, “We’re selling the cows and
getting out of business.” We’re along the Mississippi River, so for us trade is really important. American farmers in general produce a very high-quality product and we need a place for it to go. And for us, a lot of that
depends on the export markets. We know on our farm, 2/3
of our soy beans hit China, 100% of our non-GMO corn goes to Japan. And Japan’s a big market
for our beef cattle as well. And so for us, without certainty and consistency in that
market, it’s troubling. Heather, what about you? I think the most frustrating
thing, two things. We don’t have an app
to control the weather, so that is a variable that
continually can yank us around and cause a lot of heartache and stress. But secondly, those
people that we’ve elected to be our leaders need to lead. This has been a tough year? Yes. One tweet can take away decades
of relationship-building in building markets, right? But we can’t make one
week of a market rally make up for 18 to 24
months of lost revenue. When you don’t have a seed in the ground, you have nothing to market. What one word would you use to describe the challenge you’re facing right now? Unprecedented. Unprecedented? Unpredictability. It’s uncharted territory
in the business world. We’ve never have been at a point in time where we’re so reliant upon
exports to move our products, and then we find we have these
trade tariff retaliations against us that what we’re
selling our products for are at below cost-of-production levels. We’re sitting on a lot of inventory that we don’t know what
to do with right now because of all the
uncertainty in the market. Same with the pork supply. We’re going into fall,
you’ve got holiday hams. So this fall market’s a tough one to get your head wrapped around to see what we’re going
to do here in the future. The US has many trade partners. How important is trade with China? It hasn’t always been that important. I think it’s taken a
long time to get there. I mean, we’ve spent the
last two or three decades building that relationship to make them the partner they are today. When you’re looking, for
us, when we’re talking whether it’s the meat, the
protein side or the grain side, our consumer, our end user is
gonna be that middle class, so where can we build a middle class? And to date that has happened primarily we’re looking at China and Asia and where those population
growth has occurred. You build that middle class and that’s where our product’s going. So to find another China we need to build a middle class like that to scale somewhere else. You get could fit the entire population of Illinois, Indiana,
Iowa, and half of Nebraska would fit in the city of Shanghai alone. So just to see that many
people in one place, you have to wrap your head around how big the middle class is and what their demand
is for animal protein. China’s cut dramatically
the amounts of soy that they’re importing from the US. That’s from two factors. One, the African swine fever that’s reduced their hog population. They don’t need as much feed for them. They don’t need as much feed. Right now, China, its attitude
towards the United States, if I can avoid the
United States purchasing, I’m gonna buy from South America. This isn’t just a chess match that’s over whenever we
sign a deal and shake hands. There is active movement
to build infrastructure and build up capacity in
other parts of the globe, and they are willing and
ready to eat our lunch. We need three things to be
successful in the future. It’s trade, transportation,
and trust, okay? I’ll start with trust, because when you have trust
in those people who lead us. Then we need trade agreements
that we have right now that need to be ratified. The US-Mexico-Canada agreement is one. Japan seems to be on the horizon, is two. China, get it done. I’d like to build on trust. That word, trust, is paramount. When we have this political sideline here and we lose customers,
these people don’t come back just because you sign a
document and the tariff is over or ended or whatever. You have to build up trust
over many years of time. And that’s the greater concern I have too, the long-term ramifications
of this tariff retaliation. Do you think farmers are being
caught in the tug of war, especially leading up to the
presidential race of 2020? Something better get settled
before November 2020. Or what? It’s extremely complicated. It’s hard to extract just one factor. And when you ask the fight, there’s so many fights being
waged on so many fronts. If we’re just talking about
the trade renegotiation with China, it does need to happen. We have been taken
advantage of for decades. And again, to add to that complication, we’ve also had many companies
and investors in our country who have gained from that. It may be a bitter pill to swallow. I think it would be nice if
more people had to swallow it. So you feel like the farmers are taken the brunt of this trade war? I thought Wall Street–
It goes back to the fact that we can’t set our prices. So other industries
that are being impacted by these tariffs (mumbles). If were to put up a new grain
bin or buy a new trailer, a lot of those costs have gone up upwards of 20% on our cost. So those industries have a chance to pass that along to their end user. We can’t do that. President Trump just
announced a deal with Japan for the US to be exporting
more agricultural products to Japan. In the short term, it’s
really gonna be good for the livestock producer. So when we decided, we
as the United States, decided not to agree to TTP, we lost a lot of our beef market and saw an increased tariff– That’s the Trans-Pacific Partnership. Correct. We lost a lot of that to
New Zealand, Australia, and their beef market. So this is really gonna
help open up the doors to further bring in our
high-quality beef and red meats into Japan. And then like I said, our non-GMO, 100% of that ends up in Japan. And so hoping to see that
market grow and expand as well. If we can find one country to actually be able to
complete an agreement with us, it looks more favorable
for other countries to say, “Hey, we can make an agreement,
they are a trusted partner,” and hopefully we continue
to grow these markets instead of having doors shut. I want you to raise your hands for me if you’ve received a
payment from the government from the Market Facilitation Program. This is the aid that’s being offered because of the trade war. We’ve all weighed in on how
that calculation was done, with the impacts to each of our industries directly through the
trade issues with China. At least I’ve worked on that very closely through the National
Corn Growers Association and other associations that I belong to. We’ve all looked at those issues and had a direct economic figure that we can attribute
to bottom-line issues in that situation, directly attributable to China tariffs. It’s never gonna cover you fully for what we believe the
entire market loss is. I don’t expect that to happen either. But it’s a gesture that certainly helps in a struggling agreconomy right now, and I think that was
really the understanding that they tried to go
for, and also to say that, “Hey, we understand
it’s having an impact.” Dereke, do you think the president is picking the wrong fight right now? So it’s a time and a
fight question together. The fight probably is not the wrong fight, and maybe not at the same
point the wrong time. It’s taking a lot of time. 12 to 18 months to solve
something like this. I have some stayability
for a short-term fight. It’s more the long-term trend
that I’m concerned about. You want to know what we want President Trump to do for us, and I think we’d all agree that we can’t be
sustainable without trade. But there is something we
can do here domestically without fighting with another country, and that’s working with
our renewable fuels. So I say we have two ethanol
plants in our county. For us, ethanol is very important. And getting the EPA to reallocate
those gallons of ethanol is really important. For a high-octane, low-carbon
fuel source that’s affordable, you can’t beat corn ethanol. And for me, as a corn farmer
with two ethanol plants, I want that. Why should Americans be concerned about the plight of the farmer? The average consumer, the average American is three-to-four generations
removed from the farm. And it’s really easy to
not be concerned about that when you go to the grocery
store and the shelves are full and you don’t have any concern over where that’s coming from. And for me, another frustration, you talked about a tweet
or a social media post, not just from leadership
but from the average person. They see these big numbers about a Market Facilitation
payment, for instance, that comes out, or crop insurance, the support that we need
to actually survive, it becomes a negative and it looks upon that farmers
are looking for a handout or farmers are just
wanting to be on welfare, and that’s not it. I don’t think any one of us
would say that’s what we want. We want markets and free access. And feeling like we have to
fight and prove ourselves over and over again to
the average American for me is really frustrating
and disheartening. Are you optimistic about
the farming industry? Is it something you think you’d recommend young people go into? I think agriculture to me, as a fourth-generation
farmer who has two sons that are interested in farming, is that it’s like a life’s mission. It’s why you know you were
put here on this earth. This is what I’m gonna do,
I’m gonna produce food. (gentle music)

100 thoughts on “Farmers on China Tariffs: ‘This Isn’t Just a Chess Match’ | WSJ

  1. We won't win a trade war with china. Our level of reliance on their cheap labor force and products far outweighs their reliance on us.

  2. If we all became Vegan we wouldn't have to have all these wasteful food's. All our vitamins are in plants not in animals

  3. Are they actually farmers or professional farmer spokesman, their command of the english language is much better than your average college graduates, which is sad.

  4. What kind of trust are you talking about? “We have been taken advantage of for decades.” Your words.

    Whose been taking advantage of you?

    CHINA’S BEEN TAKING ADVANTAGE OF US ALL. Trump is trying to fix that.

    Go ahead and stick your head in a bale of hay. You don’t even know what it is you need. You think the globalists will give you open markets?

    You want a stable market? When do farmers NOT deal with uncertainty? You’re in the wrong business

    Trump didn’t spend the last 40 years building up the mess Nixon and the rest of the globalists made of international trade.

    The trade with China needs MOT TO HAPPEN. If you need China, you’re not in trouble because of what Trump has done. You’re a victim of you own stupidity getting into debt for all the wrong products. If you need a Communist country to bail you out, and you’re willing to kow tow to the Chinese to get that, then you’re damned.

    You have to go to the Chinese to find a middle class to pay for your products? Doesn’t that tell you something?

    THIS COUNTRY IS STRANGLING, and you seem to think you’re the only ones paying the price for the socialism that’s already destroying the world.

    Do you think I go to the market not thinking about where the food comes from?

    I think about it plenty, and I go where I know I won’t get Monsanto in my produce. You’re Big Ag. Everything you want is bad for all of us, in every way.

    If you want to be sophisticated businessmen and women, go do that, and get off the farm. You are the problem with agriculture, and you are your own worst enemy.

    Go ahead. Go on over to the dark side you stupid hick. See how that works out for you.

  5. Farmers are the cornerstone of America.

    If you can, please support local farmers! They need you, badly. Stop buying from commercial conglomerate farms (mostly anything you buy in the supermarkets).

  6. “One twist can ruin 10 years of relationship” is called freedom of speech in US, which shouldn’t be compromised for money as many views expressed by people in US

  7. Mr. Farmer's, why talk so much? USA claimed to be the most powerful country, why insist on selling your farm produce to China? There're so many countries you farmer's can sell to. Now you farmer's go asked your president, who needs who? China needs US or US needs China? Trust? We Asians and other will not and shall not trust USA.

  8. China can sign anything when they need you. Will they commit to it? Check your history books. You need different kind of rules to make a deal with China.

  9. I feel sorry for those decent farmers. All those elite's in the Senate's should be rounded and shot. China will be the biggest importer in the 21st century due to their rapid increase on middle class millionaire. Tourism will also be the next biggest and guess who is losing out and who will be the winner.. Definitely Not US..

  10. Well, good luck to find another 1.4 billion people that want and can afford your product.

    As to Japan, let’s put it in this way- don’t hold your breath.

  11. China🇨🇳has been cheating and stealing for a long time. It wants to keep cheating and stealing all the way to the top.

  12. China WILL move on and follow its Goals that have been set for 2025 , no if's or but's about it . I DONT feel sorry for any US Farmer that supported Trump on this Journey . Now YOU ARE ALL STUCK and you deserve every little Piece of it . You think that the Chinese Gov is switching over Night — BACK — the way it was and spends $50 BILLION on YOU ?? Think again , why would they do that , they already signed Contracts with Argentina / Brasil etc …. . YOU HAVE BEEN REPLACED and the worst part of those CHINESE TARIFFS that Trump is doing , they are not CHINESE GOODS , they are AMERICAN GOODS MADE IN CHINA and those Taxes are paid by the American Consumer and NOT BY CHINA . The TAX BREAKS Americans got are coming back as Tariffs then the People in the US are paying for it . China is borrowing Money like all other Countries around the World — EXEPT — they putting it in their Infrastructure and what is the US GOV doing , building 3 new US MILITARY BASES IN GREECE !!!!!!! ENJOY EVERY MINUTE OF IT , THE DOWNFALL IS COMING VERY SHORTLY and thats NO BULL . Im glad that I am DEBT FREE and nobody is coming knocking on my Door wanting their not paid for Toys back 😆😆😆😆😆😆😆😆😆😆😆😆😆😆😆😆😆😆😆

  13. Trump has a long record of being TOXIC. Americans were warned by best and brightest that he was UNFIT AND UNQUALIFIED. Those that supported him deserve what they have gotten. Heard other farmers say the market they lost which took 40yrs to build is gone forever. Trump an unstable destructive fool.

  14. I like all the farmers except for the chick she doesn’t sound like she really cares about the rest of the country that got screwed over by the Chinese stealing their jobs. At least the other farmers are understanding, and trump is working hard to get them take care.

  15. Listen, great farmers in America! There is no trust in China ‘ s dictionary, all they have is deceive!!
    Look how they took the job of your working class!

  16. Why I have this feeling those farmers understand China US relationships better than many economists, and they are way more rational and humble.

  17. When i hear farmer, i think of the dirty farmers from nepolean dynamite. Very ignorant of me and i will change that after hearing these eloquent farmers speak.

  18. US and China has been in a very close relationship in terms of culture, education, trade, tourism, counter terrorism… for decades

    No one expected current US elected president just suddenly ruin the precious relationship and put both sides in a very hostile situation.

    Ordinary people like most of us should not blame on each other, they should elected a much more wiser leader instead of a businessman who treat the citizens like the employees.

  19. Since most farmers here are profitable, why should Trump worry about them? >USD20 billion taxpayers money subsidies to farmers should be used to help the needy!!

  20. Fugg every last one of them if they voted for Trump. White farmers have gotten more money from the government than all corporations who recieved a bailout from the government during the recession. Black farmers are being treated like defacto sharecroppers. I hope every last one lose their fugging farm

  21. Poor american farmers but i think they earn it for voting trump who already said in his campaign he will go to war with china.. China is going to win though

  22. The misconception that China is ripping off USA is all propaganda

    In trade , each country will buy goods from another country that has better economy of scale.
    USA citizen had enjoy cheap goods for the last 40 years.
    Which had kept 300 million people happy with low inflation.
    However, USA has experience run away budget defect with every passing President.
    Is this the fault of trade alone.
    Just look at the military budget $800 billions. It is the uncontrol spending that leads to hugh deficit.
    Take China for example. Which USA take as a punching bag. USA spread lies propaganda fake news so to gather support from their citizen.
    Claiming IP, force Technology transfer, state support, etc.
    Every US citizen bought into idea and Trump proceed with the trade war.
    Congress inquiry cannot find any supporting evidence of IP and force technology transfer.
    When a US company shift their operation to China , are they suppose to bring their mfging process along.. is this force technology transfer.
    USA has waged so many wars and kill so many innocent woman and young children.
    Every wars the President will brainwash the people with justification of killing innocent woman and Children.
    The people supported each wars. IS IT TRUE AND NECESSARY TO KILL . Who is playing GOD.

  23. The farmers are accusing China is ‘retaliating’? China is just ‘reacting’ to US bullish trade war. .

    And they also said “We have been taken advantages for decades”, by whom? China? I’m not understanding that at first they sound like they’ve been enjoying trade relation with China, which relation took decades to build, then they complained about China took advantage of the farmers? I’m confused, I feel they want to do business with China, yet feeling resentment toward China, then blame China for tariff retaliation, for the war initiated by US.

    Am I confused or they are…?

    And don’t forget, Hwawei and Hong Kong, are being used as bargaining chips of US-China trade war, both offenses are planned and initiated by US, both are deliberate insults, especially HK is being used as pawns, the whole city is under siege and on the brink of collapse inflicted by HK terrorists trained and funded by US NED (aka CIA).

    Americans need to know more about what US is doing to other counties with insidious foreign policies.

    Many accusation US made on China are not true and fair. A lot of accusation are propagated to demonize China.

  24. US think tariffs is good but it reiterated with tariffs means no way it will go back to its starting points! Sorry folk declare bankruptcy. No trade deal until next president takes office !

  25. White supremacists terrorist gangster shd be selling to the kinds and fellow european oppressors like them.When u are more intelligence and supreme just send all ur goods go to INDIA and ARABS like send those goods to Syria and CUBA.

  26. Trump administration especially Pompeo hates China with passion. Trump and Co are ready to starve Americans just to achieve their goal.

  27. Sadly Canadians have destroyed the Steel trade by trusting Chinese Steel importers who lie about their LOW QUALITY CHINESE STEEL.

  28. American want to live a good life by selling product to China but at the same time don’t want to sell China goods as they don’t want China do well. Hard decision.

  29. American farmers are the best and produce the highest quality products. We will support them in any forms they need to combat China who doesn’t care about foods for their people.

  30. We hate the chinese but we still want them to buy our products! As long as we can make our profits who cares about the stupid chinese right? Well! We have really bad news for y'all.

  31. China is very smart. It knows US's pain points. Even though overall, the Trade war hurts China more than the US, the levers China can pull are more significant and impactful. Farmers are overly represented in American politics. For all the talk conservatives spout about ending the free lunch program and food stamps, its the farmers and their lobbying that ultimately kill conservative efforts to end these programs. When farmers talk, Republicans listen. Same goes for this trade war. Trump is doing all he can to get relief for farmers even at the expense of all American consumers. He is trying to get China to increase their purchases American agriculture to satisfy the special interests even if that means giving up more to China in the trade deal. The major winners of all this won't be the American worker, but the American farmer.

  32. Why would you be so heavily dependent on an export market? Why not just be dependent on the domestic market? It's about America First, feed your own people first or else we will have a Holomdor ..Holomdor…Holomdor…….Holmdor…Hodor…Hodor.

  33. Don’t be fooled by the morons who hate President Trump regardless whether he does or doesn’t do for America and the American people.
    The Chinese people love the American foods and the agricultural products, because they know the American products are made with regulations for safety.
    The American farmers must be informed to truly understand how the communist China operates before it’s too late for America and the American people.
    For example: if ZTE and Huawei take over the world telecommunication equipments, I can assure the world will bow and kneel to China like a concubine.
    The American farmers must understand and learn how the previous farmers prospered without China 30 years ago.

  34. the trump tariffs are forcing china to do something that should be done ages ago, to diversify their food sources and establish stronger trade relations with other countries eg. BRICS and europe. soon US will be the odd one out while the rest of the world are trading among themselves. america will no longer be needed as the leader of the world

  35. When you raise a war against others, do you still expect no harms to yourselves? Don't be naive and stop focusing on fake news.

  36. don't blame china blame Trump,china didn't take advantage of US,It is Trump who launch trade war against China,it is not Chinese but automation and technology took away jobs,American businesses in China import lots of parts from US and produce far more expensive products that cause trade imbalances

  37. Because America pick a fight with someone for the first time who can stand up to them , that empowered other to push back against American bullying I.e European , other Asia countries….

  38. Trump is directly using the trade war to gain votes in the next elections, he does not care what happens to farmers and their families. Always putting himself before this country and the people!

  39. The trust is gone as far as China is concerned if it happened once it can happen again, stability is really important in China.

  40. Why is it that they sent a journalist with a twang to interview farmers? Just like how they always send black reporters to interview black people. It’s so patronizing and obvious. Smh

  41. Americans ask yourselves who started the trade war, dont worry your president said trade war is easy to win. Now look who is getting the impact badly the Americans or the Chinese. Last thing be honest to yourself and don't blamed others.

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