Donald Trump jumped into a can of worms this time. He decided to get into a trade war with China to correct its oversized strangle-hold on U.S. exports. The only trouble is that he will wipe out a huge portion of the American economy.
One morning, the president woke up and decided to impose $50 billion tariffs on Chinese imports and considered another $100 billion worth of imports. Naturally, China responded by imposing $50 billion on U.S. imports — targeting the red states where Trump’s base lives.
The Chinese government hit our soybean farmers especially hard. In essence, Trump said not to worry about it, he would make it up to them later.
What Trump did not realize was that farming, even for huge farming enterprises, already carries massive risks. The biggest one is nature. One year of drought can kill off farms, two if they are lucky, three if they are miraculously lucky.
The dealer-in-chief has proposed a monetary drought on soybean farmers. Although, he said he would fix it later for those farmers, he does not understand. There may be no tomorrow for them.
Trump told reporters that farmers will be “much stronger than they are right now,” CNN reported:
‘If during the course of a negotiation they want to hit the farmers because they think that hits me, I wouldn’t say that’s nice, but I tell you, our farmers are great patriots. These are great patriots. They understand that they’re doing this for the country. And we’ll make it up to them. In the end they’re going to be much stronger than they are right now.’
Then, there was the definition of “make it up” to farmers. Should a soybean producer go under, will Trump buy the farmer a new farm, new equipment, other necessary investments? Doubtful.
During remarks to reporters at the start of a Cabinet meeting, the man in the Oval Office basically blamed not China, but President Barack Obama, CNN reported:
‘Don’t forget, farmers have been trending downward. Over an eight-year period their numbers have trended downward, in some cases significantly.’
Trump said he respected China’s President Xi Jinping, and that they were “very good friends:”
‘Really, if you look at it, since the start of the World Trade Organization, and they have really done a number on this country. And I don’t blame China. I blame the people running our country, I blame presidents. I blame representatives. I blame negotiators. We should have been able to do what they did. We didn’t do it. They did. And it’s the most lopsided set of trade rules, regulations that anybody’s ever seen.’
Trump tweeted that the trade deficit with China has been “going on for years:”
‘When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade. No, it sounds like STUPID TRADE — going on for years!’
White House economic adviser, Larry Kudlow said China was behaving “illegally and unfairly:”
‘Somebody’s got to do it. Somebody’s got to say to China, “You are no longer a third-world country. You are a first world country and you’ve got to act like one.” The whole world knows that China cannot continue to behave illegally and unfairly as they have.’
Featured Image via Getty Images/Spencer Platt.