NOAH WICKS JACOB KNUTSON
Tit-for-tat tariffs between the United States and China have placed U.S. farmers in a state of uncertainty as the effects on the economy are yet unknown.
The Trump administration initiated tariffs on China to curb what it deemed as controversial trade practices perpetrated by Chinese manufacturers and businesses.
However, these tariffs could negatively affect farmers around the nation, especially soybean and corn farmers in South Dakota, Minnesota, Iowa and Nebraska. More specifically, tariffs could slow “the economic engine” of Sioux Falls, according to Jason Ball, the Sioux Falls Area Chamber of Commerce CEO.
“What we’re going to see here is as the soybean market continues to be disrupted, farm families are going to come into Sioux Falls less to shop,” Ball said.
Not only could the tariffs affect Augustana students and faculty from farming backgrounds, but the effects of the tariffs could also be felt by all members of the campus from all types of backgrounds according to economics professor Brian Eggleston.
“[They] will have sort of a ripple effect in a pond,” Eggleston said. “That’s just cold, hard politics, and how the world works.”
Moreover, the university itself could suffer a downturn in enrollment numbers if the tariffs drastically slow the economy, Eggleston said.
The trade war began on March 23, 2018, when the U.S. placed 25 percent tariffs on imported steel and 10 percent on imported aluminum from all countries, with exemptions for Canada, Mexico and the European Union that lasted until June 1.
On June 15 the Trump administration announced tariffs totaling $50 billion on imported Chinese goods. China retaliated that same day with its own announcement of tariffs totaling $50 billion on imported agricultural products and other manufactured goods from the United States.
On July 10 the U.S. followed with another set of tariffs on imported Chinese goods, this time totaling $200 billion. China answered with another round of tariffs on imported U.S. goods on July 11, totaling $50 billion.
China’s tariffs on agricultural products were coupled with tariffs from Canada, Mexico and the E.U. on several U.S. agricultural goods including corn, pork, cheese and manufactured food products.
Ball said over 75 percent of the soybeans that are produced in South Dakota are exported and China has one of the largest markets for soybeans.
According to the United States Department of Agriculture, China imported more than 33.5 million tons of soybeans from the U.S. in 2017.
Tariffs make farming harder
Junior Corey Albrecht comes from a dairy and grain farm near Fairfax, Minnesota. His father, Randy Albrecht, operates the 70 cow dairy operation and grows 1,500 acres of corn, soybeans and alfalfa with two of his brothers.
Corey Albrecht said that the farming industry is tough and the tariffs are not making it any easier.
“Farmers, they work their tails off in the fields, but when it comes down to it, they can’t do anything about what price they’re going to get for the products,” Corey Albrecht said.
Corey Albrecht said that the farm has been struggling against low dairy prices for several years. In fact, his family has been more dependent on the crops than dairy to turn a profit. But the tariffs on soybeans will make that even harder.
“For us, the grain has been worse because that is a bigger part of our income,” Corey Albrecht said. “Dairy has been low for a long time. That was already low, so the tariffs didn’t cause it to drop as largely as the grain markets dropped.”
The drop in the grain markets has been noticeable. According to documents published by the USDA, corn was worth around $3.46 per bushel and soybeans $9.46 per bushel in May. Since then the value of corn has dropped to an average of $3.17 per bushel and soybeans to an average of $7.67 per bushel.
For the Albrechts, the tariffs came at an unfortunate time. Randy Albrecht said he believes his soybean harvest this year will be above average. But the drop in prices will counter any extra profit.
Randy Albrecht also said that water in low-lying areas has hindered his corn yields.
On July 24 the Trump administration announced a $12 billion plan to subsidize farmers affected by retaliatory tariffs on agricultural products.
“It’s all going to help, but it’d be better if we can get a fair price right away and not have to have the government bail the farmers out all the time,” Randy Albrecht said.
Funds allocated to farmers through subsidies may not equal out to as much as previously expected. USDA Secretary Sonny Perdue recently told a Reuters reporter that a new North American Free Trade Agreement, called the United States-Mexico-Canada Agreement, struck on Sept. 30 and could mean a decrease in the funds allocated to farmers.
Farmers prepare for long haul
Biology professor Steven Matzner grew up on a farm in Stickney, South Dakota and his father still runs the family farm to this day. He also has two brothers that farm in Minnesota.
Matzner said the tariffs could be in place for quite a while.
“There’s no definite end in sight to the whole tariff thing,” Matzner said. “This could go for a really long time.”
Senior Maddie Jenkins’s family owns a fourth-generation hog, soybean and corn farm near Blue Earth, Minnesota. They raise roughly 5,000 hogs and grow 2,000 acres of soybeans and corn.
Jenkins said her family does not worry about the tariffs because it has no control over them. She added that if the tariffs do affect her family, she would feel it. But her family has lived through worse, she said.
“We’ve seen hard times before, but we’re still here” Jenkins said. “When I was a kid, my dad and mom would tell me stories of when I was a baby and I was in cloth diapers because they couldn’t afford real diapers.”
Jenkins said during the 2008 recession her family struggled, but it did not have to sell or rent out land. She said her family did what it could during the recession and saved when the economy rebounded.
“Farming is a form of gambling,” Jenkins said. “All farmers have had hard times before, and you either make it through or you don’t. You just have to be hardy.”