Brentley Maddox Global - US Farmers Feel Weight of Trade War Pressures
Brentley Maddox Global - problems grow for US farmers as US-China trade war rages on.
TAIPEI CITY, Taiwan, November 21, 2018 (Newswire.com) - Taipei City, Taiwan, November 21, 2018 (Newswire) - As US President Donald Trump continues to up the ante in America’s bitter trade war with China and the world’s second-largest economy responds with retaliatory action, Brentley Maddox Global analysts say U.S. farmers are growing increasingly disillusioned due to the strain caused by being closed out of foreign markets.
Many U.S. farmers have lost out on import contracts with overseas businesses due to tariffs imposed by China in response to U.S. levies imposed on Chinese products. Doing little to soften the blow is a recently announced $12 billion government subsidy fund which pays out to farmers earning less than $900,000 per annum if they grow one of the agricultural crops affected by foreign tariffs but the payouts so far have not managed to offset losses caused by Trump’s trade war.
Analysts at Brentley Maddox Global say the government fund, as well as a plan by the government to purchase food crops to the value of $1.3 billion was met with mixed reactions from U.S. farmers who prefer free enterprise to state intervention.
Further exacerbating the problem for U.S. farmers is a recent oversupply of certain crops. After China imposed a retaliatory tariff on U.S. soybeans, effectively shutting down the export market for U.S. soybeans, farmers have been unable to find buyers for this year’s crops. The demand for storage has surged causing storage costs to rise and availability to decrease. Many farmers are choosing to let their crops pile up and rot, hoping for a better sale price next year.
Although the aim of the trade war was to lessen China’s trade deficit with the U.S., Brentley Maddox Global analysts say Trump’s policies are not achieving this goal. In September this year, China’s trade deficit was up 13 percent from last year, reaching a record high of $34.1 billion.
Source: Brentley Maddox Global
Categories: Agriculture and Horticulture