Link to Article
Summary:
With the trade war between President Trump and China, American soybean farmers fear for their future. Trump’s $60 billion dollar tariff against China exports could push over 300,000 soybean farmers out of the market and cause negative long-term effects on their communities and ones around them. China backfired at the U.S. stating that it could come after the $14 billion soybean industry since it is the number one buyer of U.S. soybeans. This trade war could also cause a ripple effect for other industries.
Analysis:
While I do believe that this trade war with President Trump and China could have very negative consequences, I do think that Americans/consumers will not see any direct impact. It could increase the commodities surplus and possibly bring down the prices for consumers. The trade war could also hurt other people besides farmers like fertilizer sellers and tractor sellers, ultimately decreasing economic growth.
Questions:
1. How do you think American soybean farmers will respond?
2. What other issues do you think will arise from this trade war?
3 comments:
All wars get ugly. While I support Trump's effort to reduce the gap in dollars of export between the US and China, a very unfair practice, China is deliberately targeting the US soybean economy in order to retaliate. It is certainly true that targeting the soybean economy will hurt US economic growth. But in the long run, we have to keep in mind all the benefits that fixing the gap in export dollars could offer. For instance, American products made by American industries and factories would be purchased more widely, leading to a growth in the US economy. A cost-benefit analysis ought to be conducted in order to determine whether or not these renegotiated trade plans might still be profitable. In the meantime, it is important to keep the big picture in mind, that from a holistic perspective although soybean farmers might be the hardest hit by this trade war, the US economy as a whole might nevertheless benefit from the deals negotiated by this trade deal.
Although there may be a short term surplus in soybeans, with no one to buy their product these farmers will go out of business real quickly. This will then lead to a shortage, ruining the grain feed for animals, and cascading up the food chain. It is clear that, given the clear and serious trade war approaching, there will be hardships, as in any war. Why slap the tariffs in the first place? Isn't Trump always saying deregulation leads to economic growth? Tariffs are the definition regulations, just world wide.
I think that the soy bean farmers will be outraged. Though it seems that there is some reasoning behind the trade war from a political and economic standpoint on a global economy scale, I don't think that the soy bean farmers will see this and they will only see how they are being victimized by the trading conflicts. It is likely that they will feel even more outraged because they were expecting to be helped by the trump administration and instead they are being hurt. I think that this will escalate the trade war with china and more and more domestic farmers will continue to be damaged economically.
Post a Comment