We can't overstate our concern about what the impact will be of a U.S. trade war with foreign nations - in particular, with China - on agriculture states like Iowa.
Storm clouds continue to form over farm country in the wake of President Trump's decision last month to slap a 25 percent tariff on steel and a 10 percent tariff on aluminum entering the United States; China's threat last month to impose a retaliatory 25 percent tariff on American products, including pork; and a series of back-and-forth announcements and threats between the Trump administration and China last week about tariffs on more products. On Wednesday, China targeted $50 billion of additional U.S. products, including soybeans (at more than $12 billion, China was the biggest buyer of U.S. soybeans in 2017), corn and beef (the U.S. just reopened the Chinese market to American beef in June).
"They are hitting soybeans, wheat, corn and cotton — so all the agricultural products — and this is in addition to what they announced already on pork and sorghum," said Wendong Zhang, assistant professor of economics at Iowa State University. "So essentially if this becomes a reality two months later, this will be a disastrous situation for U.S. agriculture."
This, at what is an already challenging time for the farm economy. Net farm income fell 46 percent in Iowa since 2015, reported David Peters, associate professor and extension rural sociologist at Iowa State University, in a new publication, “Rural Iowa at a Glance.” American net farm income in 2018 is expected to fall to a 12-year low, according to USDA Economic Research Service’s most recent 2018 Farm Sector Income Forecast.
Because it leads the nation in exports of pork, corn, and feed grain, ranks second for soybean exports, and is second for overall value of agriculture exports, Iowa stands to feel the pain of a trade war over tariffs as much as, if not more than any state. Our neighbors in Nebraska and South Dakota face similar economic pain.
For that reason, our tri-state governors and congressional delegations (positions filled, by the way, with men and women of the same political stripe as Trump) should lead the way in urging the administration to begin walking the U.S. back from the brink of what promises to be a catastrophe for the Heartland.
Before it's too late.