by Peter Galuszka
Virginia farmers are paying a big price for President Donald Trump’s chaotic trade war with China. If anything, it’s likely to get worse as Trump vows even bigger tariffs, drops the idea and then comes back to it.
There’s no question that Trump’s peculiar negotiating behavior and questionable logic are having their effect.
China had been Virginia agriculture’s number one export destination with soybeans leading the list, along with apples, livestock and other products.
In 2017, China bought $671 million worth of farm goods from state farmers. Then, Trump became president and quickly imposed a series of tariffs against China about a year and a half ago. Exports to China dropped precipitously to $235 million. Canada is now Virginia’s biggest export partner for agriculture.
According to the American Farm Bureau Federation, The U.S. exported $19.5 billion of farm goods nationally to China in 2017. Trump’s tariffs cut that to $9.1 billion the following year.
“It has had a big effect,” Elaine Lidholm, director of the office of communications for the Virginia Department of Agriculture and Consumer Services told me. She doesn’t expect things to get better soon.
Virginia’s leading Democratic politicians – Gov. Ralph Northam and U.S. Sens. Tim Kaine and Mark Warner – have tried to draw attention to the Trumpian mess. Northam, who grew up in the farmlands of the Eastern Shore, has said that soybeans in local fields have lost two thirds of their value.
Republicans, shy of confronting the twitter-crazed, former reality television star – haven’t really spoken much about the matter.
Ironically, Trump’s policies have sparked more government spending. Last year, the U.S. Department of Agriculture expanded a program to buy farmers crops to help mitigate their export losses. USDA then sells the goods to school nutrition programs and food banks.
The other irony with Trump’s beating up on China is that it backfires. Many experts note that it doesn’t change Chinese government behavior and sticks Americans with the bill for higher prices, since China supplies the U.S. with millions of smart phones, clothing, televisions and lots more.
Trump‘s erratic and endless cycle of insulting trade partners and allies while promising more tariffs make it very difficult for farmers and other business owners to plan for the future. They can’t know how much to plant or how much fertilizer to buy.
To be sure, there is plenty to be concerned about regarding the Chinese and trade. The Middle Kingdom is famous for stealing intellectual property, messing with deals and playing with currency exchange rates.
There are real concerns with China’s police state mentality when it comes to gathering information. It is the main reason why there are so many worries that Huawei, the Chinese information technology giant could use the next generation of 5G smartphones to glean information about Americans just as they do at home very successfully.
There also have been reputable worries that if the Chinese sell the Washington Metro system passenger cars, they could come fixed with microphones and other detection devices that might track workers going and coming from such secure employment places like the Pentagon.
It’s not laughable or really new. In the 1980s, for example, the U.S. State Department was building a new chancery building at its Moscow embassy. U.S. officials did not check what Russian workers were doing too closely and it turned out that the KGB had used the rebar in walls to act as a giant microphone. That delayed opening the facility for months.
Such behavior does not mean that the U.S. should shun China as a trading partner. It has a huge and growing economy that cannot be ignored.
U.S. business has been gaining footholds there since Communist Party leader Deng Xiaoping starting making the country’s command economy more capitalist more than 30 years ago.
These are the realities the U.S., and Virginia, must face. There are smarter ways to do it than having Trump zap tariffs on whatever he feels like and then to “order” U.S. companies to pack up and leave China. Of course, he doesn’t have the legal authority to do that. It’s just another lie and tweet that will be forgotten.
One wonders how this “order” will affect Smithfield Foods. The iconic Virginia pork producer noted for its Virginia ham was founded in 1936 and quickly became a giant agribusiness. In 2013, China’s Shuanghiu Group (now known as WH Group) bought Smithfield Foods in a deal priced at about $7 billion. That made the Chinese the effective owner of thousands of acres of property and equipment. Thousands of Virginians and other Americans are working for the Chinese. Despite Trump’s tweets, it is doubtful the Chinese will give the firm back to its original owners.
Meanwhile, it is disappointing that Bacon’s Rebellion, and other state media outlets, don’t mention Trump much when it comes to assessing his impact on the state. It seems as if he is downplayed because his presence in the White House is an embarrassing problem for state Republicans.
