1 week Ago By NEAL FRANKLIN Lincoln Journal Star
In 2018, then-President Donald Trump levied tariffs against Chinese goods. China’s response to the initial tariffs targeted agricultural products like soybeans and corn in retaliatory tariffs. Those retaliatory tariffs impacted Nebraska’s farmers, said Nebraska Farm Bureau President Mark McHargue.
“So that's where the heartburn started. It wasn't probably the initial tariff put on, but the response to our tariffs,” McHargue said. Mark McHargue, Nebraska Farm Bureau president As he started his second term on Monday, Trump didn't immediately impose tariffs as promised, but said he planned to levy a 25% tariff on products from Canada and Mexico on Feb.
1. He declined to flesh out his plans for taxing Chinese imports, but Tuesday suggested it might be 10%. Those tariffs would come on top of levies that Mr.
Trump imposed on more than $300 billion worth of Chinese imports during his first term. Those tariffs were kept in place by former President Joseph R. Biden Jr.
, who imposed additional levies on Chinese electric vehicles, solar cells, semiconductors and advanced batteries. People stop at booths to learn about farming equipment during the Nebraska Ag Expo on Dec. 12 at Sandhills Global Event Center.
Farmers and producers that import or export products could be impacted by a potential trade war. Trump’s promise to increase existing tariffs against China could again result in retaliatory action, and a tariff-induced trade war would affect Nebraska’s agricultural industry, which relies heavily on exports to China. Nebraska’s total exports to China were valued at about $2.
6 billion in 2022, according to the Nebraska Department of Economic Development. Soybeans accounted for $1.2 billion of the state’s exports to China.
Corn and beef products are also often exported to the country. During Trump’s previous term, the U.S.
implemented tariffs on Chinese goods and products like steel and aluminum. China implemented retaliatory tariffs on agricultural goods. In order to insulate farmers from retaliatory tariffs, the Trump administration used the Market Facilitation Program to compensate farmers for any losses related to the retaliatory tariffs.
The program paid farmers for certain agriculture products, like corn and soybeans, using the amount produced in 2018 and then by the acre in 2019, according to a 2020 Agricultural & Applied Economics Association analysis of the program. People stop at booths to learn about farming equipment during the Nebraska Ag Expo on Dec. 12 at Sandhills Global Event Center.
Farmers and producers that import or export products could be impacted by a potential trade war. McHargue has a farming operation that grows corn and soybeans. He said that when he was reviewing his balance sheets, he saw that the government payments led him to mostly break even.
But whether those funds will be available again during Trump's second term is up in the air, McHargue said. McHargue also said farmers he has talked to would rather profit from the open market. “We'd rather get paid for our product and not somehow subsidize because of something that our government's doing,” he said.
Agricultural trade is already globally competitive, McHargue said. People stop at booths to learn about farming equipment during the Nebraska Ag Expo on Dec. 12 at Sandhills Global Event Center.
Farmers and producers that import or export products could be impacted by a potential trade war. “It is a true global market, and that's one of the reasons that we need to be working on trade, is because we're not the only ones out there trying to sell our products,” he said. Nebraska could work with countries so that they buy the state’s beef products, McHargue said.
Additionally, he said the U.S. could work to export to countries like Indonesia, a large consumer of soybean products.
Wes Peterson, an agricultural economics professor at the University of Nebraska-Lincoln, said that although Trump has said China will pay for the tariffs, the tax itself will also impact consumers. Wes Peterson A tariff is a tax on imports that businesses pay when purchasing foreign goods. That cost can be passed on to consumers if companies increase prices after purchasing the foreign goods.
“Of course, the tariff is a tax,” Peterson said. “And like any tax, the burden is shared between the consumers and the producers.” About $89 billion was collected in tariff revenue during the Trump administration and about $144 billion was collected during the Biden administration, according to the Tax Foundation report.
Peterson said new tariffs would have a broader impact on prices and interest rates. “The extent of the tariffs would have, it's not just agriculture, it would affect all consumer goods,” Peterson said. “And then higher interest rates would affect all businesses and so on as well.
” In general, Nebraska has had a good agricultural economy with low unemployment rates and other economic factors, Peterson said. However, unemployment numbers are rising slightly in Nebraska. And Trump has signaled his intent to deport illegal immigrants and expand the definition of illegal immigration, which could also affect the agriculture industry’s workforce, Peterson said.
About 42% of U.S. crop farm workers lacked legal work authorization from 2020 to 2022, according to a U.
S. Department of Agriculture’s Economic Research Service report. However, the share of workers that are U.
S.-born is higher in the Midwest than other states. Mass deportations could impact the agriculture industry’s ability to maintain its workforce.
Retaliatory tariffs targeting Nebraska’s agriculture could add to the industry’s worries. Producers in Nebraska could also face increased costs from the initial tariffs, including the tariffs on Canadian goods. David Vetter, the president of the Grain Place Foundation, which sells organic grain and seeds, said that although most of the products the company uses are from the U.
S., some are from Canada. David Vetter “There are certain areas that can produce crops with consistent quality between southern Canada and different areas in the U.
S. that I rely on for that,” Vetter said. Trump's plan to implement a 25% tariff on Canada puts those imports in jeopardy and makes it almost impossible, Vetter said, for him to plan ahead.
“Depending on what happens and how stuff gets put in place and what it does, has a huge impact on your costs,” Vetter said. “And then, can you absorb them? Most, especially small companies, cannot.” Reach the writer at nfranklin@journalstar.
com or 402-473-7391. On Twitter @NealHFranklin Get the latest local business news delivered FREE to your inbox weekly..
