PortandTerminal.com, August 8, 2019
President Trump’s overwhelming support in rural America was crucial to his narrow 2016 election victory. Maintaining farmer’s backing remains critical to his re-election bid, but cracks are starting to show in that support
WASHINGTON – As President Trump prepares for his 2020 reelection campaign, the last thing he needs is a big drop in the American stock market or the loss of support from his base. That base of supporters includes farmers, who overwhelmingly supported him in the 2016 election. It appears as if President Trump is losing on both counts. The stock markets this week are in turmoil as a result of his continued trade war with China and his once-loyal base of farmers are losing hope as well.
America’s farmers are getting crushed
Farmers’ discontent over President Donald Trump’s escalating trade war with China erupted into the open Wednesday as his agriculture secretary, Sonny Perdue, was confronted at a fair in rural Minnesota.
Gary Wertish, president of the Minnesota Farmers Union, drew applause as he levelled criticism of the Trump administration’s trade policy at the forum with Agriculture Secretary Perdue in front of thousands of farmers gathered in a metal barn for a panel discussion.
Perdue anxiously sought to soothe the crowd as he defended the president’s policies but few were buying it.
“The U.S.-China trade war risks spinning out of control.”Stephanie Segal, Senior Fellow, Center for Strategic and International Studies
Brian Thalmann, president of the Minnesota Corn Growers Association, complained though about Trump statements that farmers are doing “great” again. “We are not starting to do great again,” he said. “We are starting to go down very quickly.”
American farmers just took another fresh financial hit from Trump’s trade war last weekend as China announced a halt to all U.S. agricultural imports after the president threatened Beijing with another tariff increase.
Joel Schreurs of the American Soybean Association warned American producers are in danger of long-term losses in market share in China, the world’s largest importer of soybeans.
China has other good options
The ongoing trade war has forced Chinese soybean importers to look to other sources to supply its needs.
“When you start becoming an unreliable supplier, people are going to start looking elsewhere”James Lee Adams – a retired farmer from Camilla, Georgia, and past president of the American Soybean Association
Mr Adams is right. Trade war or not, China needs soybeans and other agricultural commodities it once used to source reliably from the United States’ farmers. China hasn’t stopped needing these commodities. Thanks to the trade war it has simply been forced to look elsewhere to purchase them to fill its needs. Once the trade war is over, will the customers come back?
As the second-largest soybean producer in the world, Brazil is the obvious choice for China to look to. Brazilian exports of soy to China soared by +80% thanks to the tit-for-tat trade war between the United States and China. Meanwhile, China’s 2018 soybean imports from the U.S. hit their lowest level since 2008. The 2019 results don’t look any better as the trade war continues to escalate.
Copyright © 2019 PortandTerminal.com. All rights reserved. This material may not be published, broadcast, written or redistributed.