China responds to Trump's tariffs by punishing America's farmers
- Aug 5, 2024
- 2 min read
Updated: Aug 6, 2024
August 5: On This Day In 2019
Trump ratchets up his trade war…again. He announced new 10% tariffs on $300 billion worth of Chinese goods. The response from China was swift and sharp. OTDI 2019, their Commerce Ministry called his new tariffs a “serious violation of the consensus reached by the two countries’ leaders” at a G-20 meeting. So, gravely, China immediately halted all purchases of U.S. agricultural products.
The stock markets sank, and farmers got the worst of it. In response, U.S. stocks posted their largest one-day loss of the year. The move also was a major blow to American farmers who were already suffering the consequences from Trump’s earlier attacks in the trade war.
Delinquencies on agriculture loans had tripled since mid-2015, and even the normally pro-Trump U.S. Chamber of Commerce had warned that his new tariffs would “inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong U.S. economy.”
Trump then tried to ameliorate some of the consequences by bailing out farmers who had been crushed by his actions. But such cash bailouts were “unsustainable.” As Politico noted, “Direct farm aid has climbed each year of Trump’s presidency…to more than $32 billion this year — an all-time high…amounting to about two-thirds of the cost of the entire Department of Housing and Urban Development and more than the Agriculture Department’s $24 billion discretionary budget, according to a POLITICO analysis.”
Unfortunately, the U.S. got knocked down.
2024 Update: Trump is falling deeper into his rabbit hole of ruinous illogic. As the NYT recently observed: “Now, as he runs for president again, Mr. Trump is promising to ratchet up his trade war to a much greater degree… Economists say (the tariffs Trump imposed during his presidency) did reduce imports and encouraged U.S. factory production for certain industries…But that came at a very high cost, one that most likely offset any overall gains. Studies show that the tariffs resulted in higher prices for American consumers and factories that depend on foreign inputs, and reduced U.S. exports for certain goods that were subject to retaliation…
And now, Mr. Trump is now suggesting he'll tax perhaps 10 times as many imports as he did during his first term, an approach that economists say could trigger a trade war that drives up already high prices and plunges the U.S. into a recession.”
Trump's vision for sharply increased tariffs is also laid out in Project 2025.
Note: The Biden/Harris Administration has imposed some tariffs on China too. But, big differences: Theirs are designed to help the key American industries of the 21st century economy thrive; Trump’s tariffs seemed more indiscriminate and punitive rather than focused on making America great.
Programming note: Wednesday's OTDI will have more details on exactly how ruinous Trump's trade wars have been to the United States. The numbers are astonishing.
Dive Deeper
Follow the money on Yahoo Finance
Hear directly from farmers on CNN
Politico looked at the depressing numbers
Ana Swanson and Alan Rappeport analyzed his current 2024 plans in the NYT
On This Day In The Trump Administration: China responds to Trump's tariffs by punishing America's farmers