Last week, President Donald Trump announced he would impose new tariffs on hundreds of billions of dollars of goods produced in China. Many of those tariffed goods—just like the U.S. goods China has imposed retaliatory tariffs on—are farm products. Consequently, this latest round of tariffs is expected to add to the already higher prices Americans are paying for a variety of foods.
U.S. agricultural exports to China totaled $20 billion in 2017. Those exports come in about as broad a range as you could imagine. China's retaliatory tariffs have hit U.S. farmers hard.
"Soybean farmers, pork producers and a growing number of other agricultural interests across a range of states—including cherry producers, corn growers, and lobstermen—have complained that they are collateral damage caught in the middle of the escalating trade battle," the Washington Post reported this week.
The CEO of Del Monte, makers of popular canned produce, said this week that the company was forced to raise prices on U.S. consumers by 10 percent due to Trump's tariffs.
"Since China imposed tariffs last fall, [Indiana soybean and corn farmer Brent] Bible has nowhere to sell his soybean and corn crops," NPR reported this week. "And that situation just got worse, because the futures trading market started planning for higher tariffs earlier this week." Bible told NPR the tariffs had cost him $50,000 over just the past three days.
Earlier this week, Reason's Eric Boehm suggested that the most likely winner of the ongoing trade skirmishes between Trump and China would probably be bacteria, roaches, and rats, the appetites of which will be tested by all the food grown by American farmers that tariffs would cause to rot in warehouses rather than be sold.
Trump, who gave billions to subsidize U.S. farmers (and, um, Brazilian criminals) who were impacted by his earlier tariffs, has already proposed billions of new bailout dollars to help them deal with the inevitable fallout from his latest tariffs.
Does that make any sense?
It does to Trump, who loves tariffs. Last year he famously dubbed himself Tariff Man. In his 2011 New York Times bestseller, Time to Get Tough: Make America Great Again!, Trump writes that "a true commander in chief would sit down with the Chinese and demand a real deal, a far better deal. Either China plays by the rules or we slap tariffs on Chinese goods. End of story."
But it's not the end of the story.
Back in March, Trump hailed the "substantial progress" he says he'd made on trade with China. Those days are over.
"[A]fter weeks of optimistic statements by Trump and members of his administration about how trade talks were progressing, Trump abruptly escalated tariffs on $200 billion of Chinese goods last week and opened the door to even more," CNN reported this week. The network also noted that U.S. farmers are pissed over the move. That includes farmers such as this guy, who says he voted for Trump.
Trump's attempts to calm farmers came in the form of a typical Word Salad that was anything but soothing.
"Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now," Trump tweeted earlier this week. He also let those "great Patriot Farmers" know that his administration "will be making up the difference"—the income shortfall Trump's tariffs have wrought on those same great Patriot Farmers—out of "the massive Tariffs being paid to the United States for allowing China, and others, to do business with us."
Well, um, er, not exactly.
"White House economic adviser Larry Kudlow on Sunday acknowledged that the Chinese do not directly pay tariffs on goods coming into the U.S.," CNBC reported this week, "contradicting President Donald Trump's claims that China will pay for tariffs imposed by the U.S."
Kudlow also admitted something Trump, to my knowledge, has not: the very real harm that American tariffs inflict on American consumers.
Walmart, the country's largest grocer, says the latest round of tariffs will force the retailer to hike prices for consumers in the United States.
"China is not paying the cost of tariffs," Washington Post columnist Mark Thiessen, who supports the tariffs, wrote this week. "American businesses and consumers are paying."
"Trump is taxing consumers to bolster farmers, a core part of his political base," wrote Washington Post columnist Philip Bump this week.
Those taxes add up. One recent scholarly assessment of the impact of Trump's tariffs says they'll add roughly $500 to $800 in new costs to every American household, and will cost the U.S. economy tens of billions of dollars over the next year.
As messy as things are, they could get uglier still. An editor at a Chinese state-owned media company suggested "that China might cease purchases of U.S. agricultural products" altogether.
There are a lot of moving parts here—tariffs, bailouts, reprisals, tough messaging, pleas, calls for restraint, threats, and promises—seemingly with new ones added each day. I'm not an economist. Even if I were, though, I'd have a hard time comprehending what every move meant to the bottom line of U.S.-China trade.
Nevertheless, the whole is clear. Tariffs are bad for American and Chinese consumers, farmers, and food producers. In short, tariffs make things worse, not better.