At this point, I’m confused by how folks can defend any broad tariffs, because if anything has become clear to me (and, let’s just admit it, clarity is a rarity these days) it’s that the impacts of any tariff is complex, our trade imbalances are nuanced, and that this is the furthest thing from a black and white issue that I could imagine.
And this isn’t a conservative or liberal thing. Even the GOP is split on the impact of the tariffs. Senator Rand Paul, for instance, recently told radio host John Catsimatdis that he is in opposition of the Trump tariffs, “because trade has made us so rich, and really has made the world a better place.”
Paul also pointed out the negative impact on Kentucky distilleries who produce bourbon and the state’s auto manufacturers, the latter of which could see the costs of their raw materials rise while the former will see their overseas markets shrink.
“But,” the Commonwealth Policy Center’s Richard Nelson recently wrote in an op-ed, “not all Kentucky industries benefit from free trade.”
For instance, Nelson noted, the U.S. imports more wool and sheep products than it exports, and he claims that a ten percent tariff on sheep imports from New Zealand and Australia could help U.S. producers – a cry echoed by the Kentucky Sheep and Wool Producers Association, which Nelson is also a member of. But while he decries the trade imbalance, Nelson also notes that U.S. sheep production has declined by 90 percent since the mid-20th century. Surely that decline in production can’t all be blamed on imports from the Aussies and the Kiwis.
“Shouldn’t American sheep farmers be able to sell abroad at the same rate (as foreign producers)?” Nelson asks in his op-ed, after pointing out that the U.S. imports twice as many sheep and lambs as they produce domestically.
And, sure, they should. But that’s rather difficult if we aren’t producing as many sheep as we did seven decades ago.
Nelson also points out that Argentina and the U.K. restrict beef imports, and quotes a National Cattlemen’s Beef Association VP who “applauded the across the board tariffs.”
But the tariffs won’t necessarily benefit all of our agriculture producers – specifically those who grow soybeans and enjoyed good trade with China before these recent trade wars.
Because while the U.S. may import more lamb chops and mutton than domestic producers can currently provide, it exports massive amounts of soybeans.
“We export right about 50% of all soybeans produced in the U.S.,” Caleb Ragland told NPR’s Leila Fadel, “and China purchased 52% of U.S. (soybean) exports last year. So, if you see a soybean field, every fourth row of soybeans went to China last year.”
Ragland, a farmer from Magnolia, Kentucky and president of the American Soybean Association, said it used to be even higher. At one time, one out of every three rows were slated for the Chinese market. But, after President Trump’s trade war with China in his first term, Ragland said, American farmers, “lost about 9% of all U.S. production and exports to China.”
China replaced those imports with soybeans from South America, he said, and they’ve invested heavily in infrastructure to get those soybeans to their markets now. It’s lost market share, Ragland said, “and we’re likely not to get that back.”
“Our grave concern is we could permanently lose another big chunk of our export market that we are dependent on for our production.”
Ragland is very concerned. But, despite that, he still supports President Trump. He said his organization is “actively in discussions with the administration, and we need trade, and we need trade deals.”
He said if those trade deals require short term tariffs, it’s a risk they’re willing to take.
“But we can’t be in a tariff war for years on end,” Ragland said, “because we’ll die before then.”
If we don’t settle this, and sooner rather than later, small American businesses will suffer – if not from loss of trade from loss of access to raw materials. And American consumers will suffer. Not much may be clear about how to handle trade deficits, or even how to figure them. (How many soybean exports, for example, make up for imports of cheap plastic toys?)
But the suffering some folks are going to feel, and that some have felt already, are clear as crystal.
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