Tariffs could cause Ohio farmers’ net income to drop 59 percent
Retaliatory tariffs from China could lead to a 59 percent decrease in Ohio farmers’ net income within six years, a group representing Ohio’s soybean industry said.
When the U.S. on Friday implemented tariffs on $34 billion worth of Chinese goods, China swiftly hit back with its own tariffs on goods imported from the U.S., including a 25 percent tariff on soybeans.
Ohio’s soybean crop is valued at about $2.5 billion, according to the Ohio Soybean Association, which expressed “disappointment and increasing concern” about the tariffs Friday. Soybeans are the largest crop in Mahoning and Trumbull counties and second largest in Columbiana County, according to the U.S. Census on Agriculture.
“We’re now looking at a 25 percent tariff on every single soybean that we try to sell to China,” said Kirk Merritt, OSA executive director.
“This makes us less competitive in the global market and with 61 percent of all our current soybean exports going to China, it means that we’re likely to see negative effects on soybean prices and farmers’ incomes,” he said.
OSA cited an Ohio State University study that suggested these tariffs could lead to a 59 percent decrease in Ohio farmers’ net income, and a Purdue University study suggesting total U.S. soybean exports to China could drop by 65 percent. That study also found U.S. soybean production could decline by 15 percent.
“This doesn’t only hurt Ohio farmers, it will hurt the entire Ohio economy,” said Allen Armstrong, OSA president and a Clark County soybean farmer.
“We continue to believe that solutions can be found that do not involve tariffs and a trade war that will hurt all of rural America,” Armstrong said.
The opening shots of a trade war were fired when the Trump administration imposed a 25 percent tariff on $34 billion of imports from China, and Beijing promptly retaliated with duties on an equal amount of American products. It accused the U.S. of igniting “the biggest trade war in economic history.”
Because of this first round of hostilities, American businesses and, ultimately, consumers could end up paying more for such Chinese-made products as construction equipment and other machinery. And American suppliers of soybeans, pork and whiskey could lose their competitive edge in China.
These initial tariffs are unlikely to inflict serious harm to the world’s two biggest economies. Gregory Daco, head of U.S. economics at Oxford Economics, has calculated that they would pare growth in both countries by no more than 0.2 percent through 2020.
But the conflict could soon escalate. Trump has said he is prepared to impose tariffs on up to $550 billion in Chinese imports – a figure that exceeds the $506 billion in goods that China shipped to the U.S. last year.