BLACK EARTH — Recently, I was talking with friends about President Donald Trump’s latest round of tariffs and his decision to escalate the trade war with China. As we discussed how the Chinese government had fired back with tariffs of its own, one friend remarked that the Trump administration has announced a plan to help make whole the Wisconsin dairy and soybean farmers affected.
While it’s true that the White House has unveiled a new plan to divert billions of dollars in aid to U.S. farmers after throwing them under the bus with the president’s indiscriminate use of tariffs against China, I noted that dairy farmers were likely to receive just 5 cents for every dollar they lost.
But it turns out I was wrong.
In reality, some Wisconsin family dairy farmers stand to get less than 2 cents for every dollar lost as a result of the Chinese tariffs. A recent report noted that during the last bailout from tariffs, “a 55-cow dairy farm would receive a one-time payment of $725 from the bailout but stood to lose between $36,000 and $48,000 in income last year.” Sending Wisconsin farmers just 2% of what they lost means that families will struggle to put food on the table, send kids to college, save for retirement or even keep their farms.
The president’s aid program is merely an attempt to save face and will not repair the full scope of the damage he has created by starting a trade war with China. His most recent aid program comes after he established a $12 billion bailout program last year — a program that has helped just a handful of the farmers suffering from the trade war. In some cases, that money was funneled to large or foreign-owned firms, rather than the family-owned dairy farms in states such as Wisconsin that are suffering some of the most direct effects.
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Wisconsin’s dairy farms — already hurt by low milk prices and consolidation that has resulted in the closure of hundreds of family operations each year — are being further harmed by the retaliatory Chinese tariffs. One recent estimate shows that Wisconsin cheese shipments to China have fallen almost 65 percent, while exports to Mexico are down more than 10 percent. This is a drastic reduction in the levels of dairy products our state exports abroad.
And the dairy industry isn’t the only agricultural sector affected. Before the trade war began, China was buying $14 billion of American-grown soybeans every year — nearly a third of the U.S. soybean crop. When farmers lose that much business, the American market is flooded with product, driving down the price of the product even further and leaving much of it to spoil in storage.
In Wisconsin alone, the farm industry is a $88 billion economy where “each dollar of net farm income results in an additional 60 cents of economic activity.” That means billions of dollars will not be reinvested in American businesses, spent in communities such as Shullsburg and Reedsburg, or support the middle-class jobs on which so many of our families rely.
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Don’t get me wrong, I believe that targeted tariffs can be used effectively, such as when a country is illegally dumping a commodity. But in the case of President Trump’s trade war with China, it’s clear his administration has no coherent policy. Economists across the country warned against imposing tariffs on China, noting how such a move would disturb the economy well beyond the stock market. We are seeing the effects as tariffs drive up the cost of goods for American families, further damage our already struggling agriculture industry, and cost hardworking Americans good-paying, middle-class manufacturing jobs.
From his attacks on Medicaid and rural health programs, to enacting economic policies that favor the wealthy over the middle class and working families, the president is hurting rural Americans at every step of his agenda. Rather than an ineffective bailout program, what Wisconsin farmers really need is the president to end his trade war and work with Democrats on a real trade policy and efforts to strengthen the rural economy.
Farmers, who have overwhelmingly supported President Donald Trump, are most likely to be hurt by his tariffs and trade wars.
While the president has claimed that the trade war is meant to help American workers, the effects show that it is just the latest attack on the very Americans he claims to support. The president must do better for rural communities and should work to develop a trade agenda that will truly support our farmers and our workers, not create long-lasting, irreversible damage.
Billions of dollars will not be reinvested in American businesses, spent in communities such as Shullsburg and Reedsburg, or support the middle-class jobs on which so many of our families rely.