US to Offer Aid to Farmers as Trade War With China Intensifies

President Donald Trump delivers remarks in support of farmers and ranchers with Agriculture Secretary Sonny Perdue (3rd L) in the Roosevelt Room at the White House in Washington on May 23, 2019. Chip Somodevilla/Getty Images

U.S. farmers are feeling the pressure of the ongoing trade war with China, and while frustration builds, most farmers are sticking by the president in the fight for a fair agreement.

John Dunham is an economic consultant specializing in taxes and regulations and president of John Dunham & Associates. He said while tariffs are common, what’s unique about tariffs on China is how they are being used to negotiate rather than just collecting revenue.

“The Chinese have responded in a kind of stupid way which is actually going to push the costs onto the Chinese by collapsing the value of their currency a little bit,” Dunham told The Epoch Times. “Because what they’re doing then is they’re literally paying for the tariffs then because they’re lowering wages, they’re lowering profits and everything in China.”

Manipulators

This past week, China let its currency drop to an 11-year low and was labeled a “Currency Manipulator” before stabilizing it again.

“What the Chinese are doing is they’re making the currency weak relative to everybody else,” said Dunham. “Which means all they’re doing is making everything everywhere else more expensive, and in effect stealing from their own citizens.”

Dunham said the Chinese government could manipulate anything in China because it’s a controlled economy.

“The government owns literally everything,” said Dunham. “And they do manipulate their currency; they have always.”

Support for Farmers

Dunham said there are two reasons farmers get support: political and economic reasons. With farmers being so dependent on perishable products, they can quickly go bankrupt in the case of being unable to sell their crops.

“Farmers tend to get supported, and that’s gone on since the depression,” said Dunham. “And supporting the farmers also politically is a good thing because farmers have a lot of senators. So they tend to get a lot of handouts and support.”

Dunham went onto say that supporting the farmers isn’t helping consumers in the United States.

“The tariffs are affecting consumers, which is always the case with the tax,” said Dunham. “All a tariff is really is just a consumption tax.”

Loss and Gain

According to a report by the Wall Street Journal, the U.S. Treasury has collected $63 billion in tariffs over the last year, with roughly half of that coming from China after the United States imposed new tariffs of 25 percent on about $250 billion in Chinese goods.

Currently, the U.S. is on track to take in $72 billion in tariffs a year, and if additional tariffs of 10 percent are imposed on the remaining $300 billion in Chinese goods starting September 1 as announced, that total could go up as high as $100 billion a year.

In retaliation to the threat of more tariffs, the Chinese Ministry of Commerce announced Beijing is canceling all purchases of U.S. agricultural goods and threatened to impose additional tariffs on U.S. farm products.

Government Price Support

Dunham said most farmers wouldn’t care about selling to another country since they are getting paid by government price support programs that have been around since the Depression, who often buy farmer’s crops at a support price and maintain vast stockpiles of products like corn and soybeans.

“Sometimes it just gets burned in the fields because there’s no demand for it, or plowed under,” said Dunham.

Some farmers are applauding the new tariffs on Chinese goods due to Chinese exporters flooding the U.S. market with their production. Tariffs are bringing back business says Christopher Ranch Executive Vice President Ken Christopher in Gilroy, Calif. on May 30, 2019. Josh Edelson /AFP/Getty Images

Continued Tariff Aid

President Trump said on Twitter, “As they have learned in the last two years, our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do—And I'll do it again next year if necessary!”

Dave Daniels is the owner of a dairy farm in Kenosha County, Wisconsin. He said its been frustrating and tough, but as they keep talking he’s happy to wait and see what happens in the next few months.

“I’m just one vote, I guess,” Daniels said in an interview with the Associated Press. “But ... it is the rural vote that helped President Trump get into office, and I think that’s what China’s trying to play, that and move them against him.”

The U.S. government spent $28 billion over the last year on bailout programs to help U.S. farmers offset the effects of the trade war.

Dan Moss, of the National Potato Council, dons his 'Make Potatoes Great Again' hat before joining U.S. President Donald Trump in the Roosevelt Room at the White House in Washington on May 23, 2019. Chip Somodevilla/Getty Images

Dale Moore is the executive vice president of the American Farm Bureau Federation. He is hoping a trade agreement like the USMCA, Japan agreement, or EU deal on beef will come out of the talks.

“Our farmers and ranchers ... appreciate that the president is in the fight to try and get China straightened out,” Moore said in an interview with the Associated Press. “They appreciate that he has provided some trade mitigation tools like the market facilitation payments, which help cover some of the impact that we’re dealing with.”

The United States and China are scheduled to meet in September to resume negotiations.

President Trump in the Roosevelt Room with American ranchers and farmers at the White House in Washington on May 23, 2019. Chip Somodevilla/Getty Images