In the midst of a whirlwind trade war, U.S. and Chinese officials are talking once again. But that doesn’t mean the Trump administration is closer to striking a deal to immediately help North Carolina’s struggling farmers, experts say, and a new poll shows rural support for Trump is slipping.
Days after China announced it would slash agricultural imports from the U.S. — a shriveling threat for state crop growers caught in the middle of the field — the Trump administration and the Chinese government reopened negotiations with a phone call Aug. 13.
“Both sides have agreed to talk again on the phone within two weeks,” the Ministry of Commerce said Tuesday.
The announcement was issued around the time U.S. Trade Representative Robert Lighthizer’s office delayed a promised 10% tariff on $300 billion in Chinese imports. The U.S. since 2018 has collected a 25% tariff on imported Chinese goods totaling $250 billion. The U.S. and China have been going tit-for-tat since early last year. China broke promises to buy more agricultural goods from the U.S. and continued selling Fentanyl to the states, Trump said. Both countries have since piled tariffs on items from farm goods, to industrial machines, to electronics.
Trump’s administration gutted diplomatic protocols followed by past administrations — both Democratic and Republican, said Andy Taylor, a professor of political science at N.C. State University. With his “hardball” approach, Trump wants China to fundamentally change its behavior. But even if the Chinese government is ready to negotiate, it may be too late to repair the economic damage.
Businesses need supplies, and they need them fast. If trade disputes between China and the U.S. are rocking businesses, those companies will simply seek suppliers in other markets, Taylor said.
That’s bad news for farming.
In 2016, U.S. farm exports to China totaled $21.4 billion, making the country the top market for U.S. agricultural goods. Those numbers have plummeted, with the U.S. exporting $9.2 billion in farm products to China in 2018 — a development attributed to the tariff battles.
North Carolina ranks 13th on the list of top U.S. export states. In 2017, pork, tobacco, and soybeans were among the state’s most valuable products, shows data from the U.S. Trade Representative. China is the third largest market for North Carolina’s goods, outranked only by Canada and Mexico.
The North Carolina pork industry, which doesn’t depend on Chinese buyers, will survive the tumult, said Andy Curliss, president of the N.C. Pork Council. Other industries — like tobacco and soybeans — may not be so lucky.
“We’ve talked many, many times about the short-term pain for the long-term gain, but that short-term pain is getting longer every day,” said Larry Wooten, president of the N.C. Farm Bureau, in an interview on Spectrum News’ “Capital Tonight.” Wooten, a tobacco farmer, has called damage from the trade war “deep and . . . ongoing.”
None of the roughly $105 million in federal farm assistance that poured into North Carolina since last year can legally be used to help struggling tobacco farmers, Wooten said.
In 2017, North Carolina tobacco farmers exported $162 million in crops to China, Wooten told the News & Observer in May. Last year, that number dropped to $4 million.
Soybeans — a major export to China — comprise 1.6 million acres of North Carolina farm land, “the biggest footprint of any crop in the state,” says information from the N.C. Soybean Producers Association.
“The soybean industry is hopeful that negotiations will move forward and that agriculture will not be caught in the crosshairs of a trade retaliation for a crop that meant nearly $14 billion in sales last year,” the NCSPA said in April 2018 — as Trump escalated threats of tariffs on Chinese goods.
The industry has since wilted. In 2019, U.S. soybean prices dropped to $8 per bushel — the lowest in a decade. China, the world’s largest soybean consumer, turned to Brazil for extra supplies after the U.S imposed a retaliatory 25% tariff on soybeans.
Tariffs are bad public policy, and the federal farm subsidies that prop up a struggling industry exacerbate the problem, said Daren Bakst, senior researcher for agricultural policy at the conservative Heritage Foundation. The U.S. government, which paid out $12 billion to farmers last year, has promised another $16 billion in emergency relief as part of the U.S. Department of Agriculture’s “Market Facilitation Program.”
Farm subsidies distort the market and allow the government to pick winners and losers. Bakst said. While U.S. farmers are suffering in the battle with China, so are many others.
“Consumers, small businesses, manufacturers, a lot of people are getting hurt through these trade disputes through higher prices for products,” said Bakst, a former John Locke Foundation legal analyst.
Nine out of 10 counties that voted for Trump in 2016 have received some portion of the USDA’s emergency farm support since last year, shows data obtained under the Freedom of Information Act by the nonprofit Environmental Working Group.
In early July, 79% of farmers said they approved of Trump, shows data from a Farm Journal poll. Another report from Purdue University’s Center for Commercial Agriculture cited a spike in confidence among farmers concerned about the economy.
But those numbers are dropping.
Just 56% of farmers say they would vote for Trump again, an Aug. 14 survey from Farm Journal says. The poll was conducted the week of Aug. 6, and included 2,300 farmers.
Almost 70% of farmers cast ballots for Trump in 2016.
“These days, it takes a lot to dislodge your [political] group from its allegiance,” Taylor said. “It takes a lot more than it may have done in the past. But that doesn’t mean it’s impossible to do it. And there’s gotta be a point when certain farmers have had enough.”
Like politics, trade deals change with the wind — and it’s tough to divine what may happen in the coming weeks, Taylor said. But one thing is certain. If things aren’t resolved soon, some parts of U.S. agriculture may be permanently scorched.
“The clock is ticking, and that in itself is going to affect the relative strength of the U.S. and China in these negotiations,” Taylor said.
The Trump administration should abandon tariffs and seek to settle its trade disputes via the World Trade Organization, Bakst said. If diplomatic processes don’t work efficiently, “then that’s what we should be focusing on.”
“You’re shooting yourself in the foot with the tariffs,” Bakst said. “People like to say, ‘Well, I’m willing to take on the short-term pain.’ Well, I’m glad you are, but what about the family that’s having a hard time getting through, and is paying higher prices for products?”
“You’re now making that decision for everybody.”