Tariffs on crops would put some Kansas farmers out of business, one producer warned Friday after China threatened retaliation against President Donald Trump’s trade policy.
Prices on commodities already are low. Farmers are operating on razor-thin margins, said Glenn Brunkow, who farms corn, soybeans and other crops near Wamego. And Kansas farmers are expected to harvest substantially less wheat this year than in the past.
Add a trade war and the future is bleak.
“There’s a lot of producers out there that this will be the end,” Brunkow said.
China plans to impose 25 percent tariffs on roughly $50 billion of U.S. goods in retaliation for the Trump administration’s announcement Friday that it would impose duties of the same amount on $50 billion of Chinese goods, according to a report from the official Chinese news agency Xinhua.
The tariffs will come in two steps, beginning with duties on 545 U.S. products worth $34 billion that will be focused on farm goods, cars and seafood, Xinhua said. That includes wheat, corn, soy and beef, among other products.
A second round of tariffs, to be imposed on an unspecified date, on 114 items worth $16 billion will mostly hit chemicals, medical equipment and energy products.
In announcing the U.S. tariffs, Trump said he was fulfilling a campaign pledge to crack down on what he contends are China’s unfair trade practices and its efforts to undermine U.S. technology and intellectual property.
“We have the great brain power in Silicon Valley, and China and others steal those secrets,” Trump said on Fox News. “We’re going to protect those secrets. Those are crown jewels for this country.”
Fridays’ tit-for-tat moves bring the United States and China to the brink of a trade war — with Kansas agricultural producers fearing they’ll be caught in the crossfire.
“We understand a lot of what we grow is exported and exports are our lifeblood,” Brunkow said. “We’re pretty concerned with some of the stances the administration has taken and some of the policy or guidelines.”
Kansas exported $845 million of wheat in 2016, according to the United State Department of Agriculture. That’s actually down from high of $1.5 billion in 2008.
Corn exports from Kansas totaled $424 million in 2016. Soybean exports were worth $925 million that year.
Fridays’ tit-for-tat between the United States and China was not unexpected. The U.S. had been signaling its intent to impose tariffs since April, and the China had previously threatened retaliatory tariffs, including on agricultural products.
For weeks, farmers have watched developments in the news — and the markets — waiting to see what would happen.
Kansas wheat farmer Jeff Hatfield said he doesn’t like tariffs and that it would cut down on his income. But he said the current situation is kind of like the weather: It’s out of his control.
“I try not to dwell on any of that because it will drive you nuts,” Hatfield said. “If you’re going to attempt to do this, listen to all this, these markets have a way of working themselves out.”
Joe Jury, who has cattle and grows corn and sorghum near Garden City, said he agrees with Trump that the United States needs to stand up to China. He voiced confidence in U.S. officials working on China policy.
“I don’t think the sky is falling yet but I think they’re going to play hardball,” Jury said of China.
The Kansas Soybean Association noted in April that the top five export destinations for all Kansas products are Canada, Mexico, Japan, China and Germany — and that the United States runs trade deficits with all of them.
The association encouraged the White House to work with Congress to improve global competitiveness as the way to address trade deficits.
“KSA has expressed its views to our congressional delegation and is grateful that they — along with our partners within (the United States Department of Agriculture) — understand how international trade supports the economy in rural America,” Dwight Meyer, chair of the Soybean Association’s policy committee, said in an April statement.
U.S. Sen. Jerry Moran and Sen. Pat Roberts didn’t immediately comment on Friday’s trade developments. The two have previously warned of the damage a trade war would cause.
The two senators joined U.S. Agriculture Secretary Sonny Perdue in a roundtable event near Manhattan last month. Perdue said then that Trump was aware of how important exports are to the agricultural community.
“He has, I guess I’d characterize as, a unique negotiating style that maybe sometimes we farmers don’t understand,” Perdue said. “But nonetheless he’s been pretty successful in that.”
If Trump is wrong, Kansas farmers like Brunkow may pay the price.
Less income will mean cutting back, he said. Maybe things don’t get replaced as often, or you drive an older car.
Perdue gets the importance of trade, said Brunkow.
“We’re just hoping to make the president understand ag is a bit different animal” than other commodities, Brunkow said.
Contributing: Associated Press