Small American farmers and manufacturing firms are suffering the most from Donald Trump's unwanted and horrific trade war he allowed to lapse into reality on July 6.
Even before tariffs against China became official, soybean farmers in states that voted Trump president were already feeling the heat from a Chinese slowdown in soybean purchases. That pinch became a pain when Chinese importers began canceling American soybean exports wholesale starting July 6.
China's retaliatory tariffs on hundreds of U.S. goods include top exports such as soybeans, sorghum and cotton are hammering U.S. farmers in states such as Texas and Iowa that backed Trump in the 2016 U.S. election. For American soybean farmers, the pain they're enduring is particularly painful.
It was American soybean exports in May that slashed the U.S.' trade deficit to its lowest since October 2016. Now, Trump is repaying the grit and hard work of American soybean farmers by destroying their exports.
More than half of America's soybean exports go to China, giving China massive influence over the price of soybeans. Trade worries slashed the price of American soybeans by 15 percent in recent months.
Ironically, America's trade gap with China in May rose to $32 billion from $30.8 billion. U.S. exports of goods and services climbed to a record high in May, outpacing a jump in imports. This will likely not be the case in July.
Trump's trade war is already damaging his farm, and his state's broader agricultural economy, said Brent Bible, a farmer who cultivates 5,000 acres of corn and soy in Indiana.
Bible said farmers like him are now delaying purchases of tractors, grain storage facilities and other items to make ends meet. Trump's trade war with China has already wiped-out his yearly profit margin of eight percent to 10 percent.
The ignorant Trump in June levied a 25 percent tariff on steel and 10 percent on aluminum imported from Canada, Mexico and the European Union (EU) in the name of Trumpian "free and fair trade." The EU retaliated and imposed tariffs on $3.2 billion of U.S. goods, including bourbon, motorcycles, and steel.
Canada levied tariffs on billions of dollars of American metals, agricultural products, and other goods. Mexico is hitting U.S. products such as cheese, apples, blueberries, pork bellies, and steel.
Those duties followed earlier U.S. tariffs on Chinese steel and aluminum imports and Chinese counter-tariffs on $3 billion in U.S. goods, including soybeans, pork, fruit and scrap aluminum, among many others.
Economists estimate Trump's tariffs result in the loss of about 170,000 American jobs and a remove a tenth of a percentage point in Gross Domestic Product growth. Those figures will worsen, perhaps considerably, since Trump has threatened an additional $400 billion in tariffs on Chinese imports and $275 billion in auto imports.
These new taxes will escalate total job losses to 700,000 and remove a half-percentage point of economic growth, likely force the U.S. into recession, said Mark Zandi, chief economist of Moody's Analytics.
