Trump essentially concedes that his tariff policy is a disaster, sets up another cash bailout to keep ag sector solvent
Here we go again. Trump and his tariff policies during his first administration dealt our country’s farmers a fiancial body blow and it looks like we’re about to see it happen again. Why? Because Trump cost our soybean producers the loss of their best overseas customer, China.
You’ll recall that it got so bad by 2019 that the Trump administration, mired in its trade war with China, paid billions to farmers hurt by the low prices caused by the loss of a good customer. Aid to farmers (and believe me, I don’t begrudge this money — a financially solvent farm sector is perhaps the most important element of national security) soared during his administration, going from $11.5 billion in 2017, his first year in office, to $32.8 billion in 2020, his last full year in the White House.
Though trade with China never fully recovered after the debacle back then, the Chinese have since stepped up their purchases — until this year, that is. The American Farm bureau reports that in 2024, China bought 985 million bushels of U.S. soybeans, which was about half of all our soybean exports that year. This year, from January through August, China bought just 218 million bushels. During June, July and August, the United States shipped virtually no soybeans to China.
Indeed, The American Soybean Association, in a publication released about six weeks ago titled Soybeans Without a Buyer: The Export Gap Hurting U.S. Farms, gives a data-loaded recap about the severity of the financial punishment created by the pullback of Chinese business.
The Trump administration, as it did during the previous trade fiasco with China, is essentially conceding that it will need to infuse cash-strapped farmers with a bailout if the U.S. doesn’t come to some kind of terms with the Chinese. For its part, China has developed other sources, mainly in South America, as reliable suppliers of the much-needed crop, and is in no particular rush to turn to the United States for supplies.
And anyway, there is a much more profound consequence to all this. Even if Americans do get some more orders in the near future from China, the growth of suppliers in South America has added massive inventories of soybeans that will only serve to keep world prices in check.
Considering that global crop production over the last 6 decades has far outpaced population growth, Trump’s tariff-initiated expansion of South American production only adds to the large supply of soybeans on world markets. I think that explains why, even as farmer input costs are going up like crazy, soybeans are trading now at levels that were common 10 to 15 years ago. As an old grain and livestock trader/broker, I think this is the permanent damage created by Trump and his policies.
Meantime, there will be a summit of sorts between the U.S. and China at the end of this month. No doubt soybeans will be on the agenda, but as this year’s crop is being harvested and with no Chinese buyers in sight, farmers have plenty of reason to worry.
I imagine they must be sick of this.
Being used as a bargaining chip while the world’s superpowers hammer out trade deals only aggravates the natural and economic uncertainties that come with farming.
I wish Trump would stop with this because farmers don’t need it.
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty in Vietnam.
Photo: public domain, wikimedia commons
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