Financial markets gave a thumbs-down response to President Donald Trump’s threat last week to impose higher tariffs in the trade war with China. Investors’ negative reaction signals they’re growing weary of uncertainty and would welcome a return to normalcy with global trade.
The Dow dropped 700 points Monday morning as the trade war with China escalates.
It is anyone’s guess whether Trump’s latest bluster will produce favorable long-term results, but for now, it’s a signal the president’s grievances against China won’t be resolved until it learns to play by the rules and stop stealing technology, manipulating its currency and negotiating trade deals fairly and honestly.
Trump, the U.S., and the global economic community certainly are united around the need to discipline China for its bad behavior, but here in farm country, it seems farmers and ranchers are being punished worse than China. Having lost access to some of their best trading partners, U.S. farmers certainly have become the pawns in the trade battle between the U.S. and China.
Crop and livestock producers have seen profits decline and in some cases, disappear as the trade war drags on. Ag commodity prices are tanking. It will remain difficult to be optimistic about the economy in farm states until farmers and ranchers again can market their meat and grain competitively around the globe.
We residents of farm country are patiently waiting for the president to make good on his claim that trade wars are easy to win. If that is the case, give us the trophy and let’s return to normal as quickly as possible.
As dreary as the situation is, there may be a reason for optimism in Trump’s latest threat,
It’s knowing that farmers and ranchers won’t be the only ones feeling the sting.
If the president unilaterally follows through on the threat to impose a 25% tax on $200 billion of Chinese goods, it means all Americans will be paying higher prices when China retaliates against U.S. tariffs. Driving up the cost of raw materials and manufactured goods drives up prices for consumers. They will feel it in the pocketbook.
Farmers won’t be the only pawns in the trade war. Their cousins in the city also will get a lesson about how easy it is to win a trade war.
An editorial from the Kearny Hub (Nebraska).