NORTHFIELD, Minn. (KMSP) - Growing corn, soybeans and raising hogs for years have been big business for Northfield farmer Bruce Peterson. Now, he joins a number of farmers who are bearing the brunt of the Trump Administration’s trade wars.
U.S. tariffs, combined with the retaliatory tariffs imposed on the U.S. from countries like China and Mexico, are driving down global demand for American farm goods.
“Prices have not been very good really the past three to four years, things are tight economically already and this is just one more thing thrown at us,” said Peterson.
The Department of Agriculture is now offering some relief, to the tune of $12 billion in aid. Peterson calls it a short-term fix.
“At least they’re recognizing the detriment that the trade wars are having on our markets, but we need a fair and open market and an end to the trade wars,” said Peterson.
Hamline University political and economic expert David Schultz says this most recent bailout should raise a red flag.
“There are two reactions, one - not sustainable and b) not economically efficient to do,” said Schultz.
The agriculture industry has depended on federal subsidies for decades. Some have even criticized Trump for compensating farmers for losses he created.
“And so tax payers have to say well, $12 billion now, is it another $12 billion in six months, is it another $12 billion next year?” said Schultz. “I think these become legitimate concerns.”
As for Peterson and his farm, he'll make due, but it's next year that worries him.
“If I get an opportunity to host a trade team from a foreign country, I’d be glad to show them the farm, show them how we farm and hopefully we can encourage them to buy U.S. products,” said Peterson. “I’d much rather have that than an aid package.”
The U.S. has been running large trade deficits for years. Professor Schultz says that time will tell if this type of trade war is winnable. The aid package will include direct payments to growers. It's expected to be rolled out in September.