Fears of farm crisis mount in ongoing trade war

Farmers fear they are headed for deep trouble amidst the ongoing trade war and tariff uncertainty and bailing them out will be far more expensive than it was in 2018, when exports to China took a big hit.

ST. PAUL, Minn. (FOX 9) - For months, elected officials and industry leaders have raised the alarm. They fear farmers are headed for deep trouble amidst the ongoing trade war and tariff uncertainty and bailing them out will be far more expensive than it was in 2018, when exports to China took a big hit.

The voices of concern keep growing as the US planting season gets underway.

Uncertainty over exports

What we know:

On Wednesday, Minnesota State Auditor Julie Blaha joined a national virtual press conference to sound alarm over newly imposed 10% tariffs on all imports. As other countries respond with tariffs of their own, farm exports could take a huge hit around the world.

"Trump spends a lot of time talking about how tariffs are going to make us rich," Blaha said. "Well, I don’t think we should talk about anyone getting rich before we make sure farmers don’t go broke."

Joined by state treasurers from five other states, all Democrats, she said farmers need to hear a plan to whether the uncertainty. And she warned that the $28 billion in bailouts that came after a trade war with China during Trump’s first term would be nowhere near enough this time around, as countries from around the world are now involved.

"The kind of bailout we had in 2018 after tariffs in agriculture would not be big enough to balance out what we’re going through right now."

The edge of crisis?

What they're saying:

The president of the Minnesota Farmers Union says the alarm is justified. Gary Wertish worries we’re on the verge of a crisis like what we saw in the 1980s if trade deals aren’t finalized very quickly.

"The longer this drags on, we’re going to lose some farmers," Wertish told FOX 9. "If you don’t have the equity, you might not have the choice whether you want to keep farming or not."

Part of the issue, he says, is that profit margins in farming are slim already, with costs of things like fertilizer and equipment much higher.

And what makes this more concerning than the trade war with China in 2018, when exports took a huge hit, is that now it’s not one country, but many. Farmers then turned to other markets to export product, but those are taking a hit, too.

"Even if it ends tomorrow, we’ve already created a lot of damage and that’s the part that’s going to take decades to get over."

Reassuring nervous farmers

Trump's response:

On Tuesday, President Trump acknowledged the growing fears in a post to social media, writing "The USA will PROTECT OUR FARMERS."

And the White House acknowledged that a relief package was being considered.

But there is skepticism any bailout could be enough. The ultimate cost after the 2018 trade war with China came to $28 billion. This time, it’s not just China that may cut their imports.

The anxiety was apparent during a recent series of town halls that Wertish held in rural areas of Minnesota.

"One lady at one of the meetings," Wertish recounted, "she mentioned the president’s betting the farm on tariffs. But he’s not betting his farm. It’s the farmers livelihoods he’s playing with now."

Politics Tariffs