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Trade War Uncertainty Continues

U.S. and China Exchange Tariffs

On Aug. 26, President Trump expressed optimism over developments in trade negotiations with China. Talks are expected to resume despite conflicting claims from the American administration and Chinese officials about communications between the two sides.

On Aug. 23, China announced they would retaliate against proposed new tariffs on roughly $300 billion worth of their goods by increasing tariffs rates on $75 billion of U.S. goods, including agricultural products such as soybeans, wheat and beef.

The dueling announcements preceded a weekend in which Trump appeared to express some doubts about his trade war strategy. His advisors later walked that back, saying the only second thoughts the President had were about how tough he needed to be against China.

As tensions and uncertainty continue in the ongoing trade war, U.S. agricultural producers are feeling the consequences. AgWeb reported on Aug. 23 that grain markets “took a beating” after China’s announcement. While the President has promised more aid will be available to farmers if the trade war continues without resolution. A Farm Journal Pulse survey conducted earlier this month found only 8 percent of farmers believe the Market Facilitation Program payments will offset the losses they have faced this year. More than a third, 35 percent, said the payments would not be nearly enough to make up the difference.

Over the weekend, Senator Lindsey Graham, R-SC, encouraged the administration to not back down against China. During an interview Sunday, Graham said, “We’ve just got to accept the pain that comes with standing up to China.” While farmers have accepted there will be damaging fallout from the trade war, new reporting may suggest their support of the President’s policies is not absolute.

The National Farmers Union President Roger Johnson continues to call for trade markets rather than continuing and escalating conflict, “They [family farmers and ranchers] can’t withstand this kind of pressure much longer.” Yahoo finance quoted Blake Hurst, president of the Missouri Farm Bureau, as saying, “So I think there’s going to be some challenges for the Trump administration come election time if we don’t see a turnaround in these trade markets.”

A poll conducted by Farm Journal Pulse last week found that farmers still overwhelmingly approve of the job the President is doing, with 71 percent strongly or somewhat agreeing with the administration. However, that approval rating is down eight percentage points from the poll conducted in July. The Farm Journal points out that even a Fox News poll showed a decline in support from groups such as rural and small-town voters who have been considered strong supporters of the president.

China has shown no signs of conciliation through high level government officials or state-run media. Talks, however, are expected to continue as both sides publicly express a desire to find a mutually acceptable resolution to the trade war that has disrupted local to global markets.

 

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