by Willis Krumholz
The Star Tribune just ran an article titled, “A test on the farm: Minnesota farmers struggling with low prices amid tariffs weigh their support for Trump.”
The article goes on to make it look like farmers’ support for Trump is dwindling. “The plain old truth is that Donald Trump is killing the American farmer,” says one farmer quoted in the article.
The Star Tribune article mentions that Trump’s support in farm country “continues.” Actually, Trump’s approval among farmers just hit a record high, which goes unmentioned by the Star Tribune.
The article, written by Jessie Van Berkel, was released on January 20, 2020. Just several days before this article, President Trump cemented his Phase 1 deal with China on trade. Ms. Berkel makes it sound like China may not follow through on the promise to buy more ag, which is certainly true, but in December 2019 China had already begun to lift tariffs on U.S. pork and soybeans, the two main American ag exports to China.
And in that same month, after months of Democratic stonewalling, the House finally passed the U.S.-Mexico-Canada Agreement (USMCA) trade deal, which replaces the North American Free Trade Agreement, or NAFTA. Since that time, USMCA has passed the Senate and will soon be signed by the president. USMCA helps all farmers, but will benefit dairy and protein farmers the most.
But there’s something totally missing from the media analysis on farmers and the trade war, which has been full of wishful thinking about rural areas abandoning President Trump. That wishful thinking is a total fantasy.
For starters, China needs U.S. pork because of African swine fever (ASF). China was already buying record amounts of U.S. pork before the trade deal, and it will surely buy even more now that the trade deal was cemented.
The other problem with the popular narrative occurs when one simply looks at a chart of corn and soybean prices. They dropped around 2014, and have barely budged since. That has a lot to do with U.S. monetary policy, where temporary prices tricked farmers into overextending, which is causing much of the pain that farmers face today. The blip from tariffs is barely noticeable.
Not only that, but China has a long history of restricting or outright banning U.S. ag imports well-before the trade war started. The mistreatment of American products and farmers is, in fact, one of the many reasons Trump started the trade war in the first place. For example, China – under a dubious pretext – heavily restricted U.S. pork imports in 2011. The real motive, of course, was to grow China’s domestic pork supply. Even during the trade war, China was importing more pork than it had before. And because of the Phase 1 deal, China will import more still.
One almost thinks the Star Tribune could issue a clarification, but this is only one of a long line of articles furthering this false narrative. Intelligent people have already seen through it.
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Willis L. Krumholz is a fellow at Defense Priorities. He holds a JD and MBA degree from the University of St. Thomas, and works in the financial services industry.