How Trump’s Trade Policy Could Hurt U.S. Farmers

Donald Trump has not demonstrated impressive awareness so far when it comes to the unintended consequences of his decisions as President of the United States. One of the next major decisions for President Trump could well cost many American farmers their livelihoods.

Specifically, as he explores making new trade deals to improve the American economy, he will face the possibility that tinkering with the complex web of global trade agreements could lead to increased tariffs or taxes on U.S. crops. American farmers, who have mostly benefited from globalization, export over two billion bushels of soybeans annually and roughly one half of that amount is exported to China.

Adding tariffs to Chinese steel, for example, could help steel production in the United States, but the unintended consequences could very well be retaliatory trade action against U.S. soybeans. While rural voters went for Trump by almost a 2-1 margin last fall, they represent a segment of the electorate that stands to lose significantly if his ability to grasp the complexities of international trade are as limited as his ability to understand the U.S. healthcare system.

This is an administration that has already demonstrated that it fails to see the unintended consequences of policy decisions. For example:

  1. The first “Muslim travel ban” was poorly vetted and resulted in chaos and litigation. Representatives from the Department of State and Homeland Security were barely consulted before it was rolled out.
  2. The AHCA, or TrumpCare as some call it, was rushed through Congress and does not cover as many Americans as Obamacare despite President Trump’s promises. Congress and the Trump administration seemed to be looking to each other for leadership and consequently the roll out was botched and it will likely never be enacted.
  3. Trump’s decision to go ahead with the construction of a wall on the U.S. Mexico border does not take into account the actual costs of purchasing the land necessary or the fact that the wall will do little to halt immigration or drug trafficking.

While President Trump has been working hard to deliver on his campaign promises (draining the D.C.swamp, building a wall, providing better health care to more Americans at a lower cost) it is clear that he has been unable to look far enough ahead to discern if his decisions will have further consequences.

Farmers and those working in U.S. agribusiness live in a world that is already volatile. On top of crops, disease, weather, and labor issues, U.S. farmers also need to be savvy about global issues and competition in Brazil, Russia, and the Ukraine. Other countries are quickly becoming more competitive and Russia, for example, has recently become a leader in wheat exports.

President Trump needs to be careful as he begins renegotiating trade deals: the consequences might not be as fantastic as he thinks.