Wall Street responded to the Trump administration’s desperate fumbling of trade issues with China by sending stock markets into a 3% plunge in the Dow Jones Industrial Average today.
Trump’s mishandling of the tariff negotiations with Chinese President Xi Jinping is just the latest example of the president’s economic illiteracy, ironic for a man who based his campaign on his made-for-TV image as a successful businessman — an image belied by the reality of his multiple bankruptcies and failure to pay his creditors.
Now, the cost of Trump’s ill-informed and economically damaging trade war and tariff policy has been made even more explicit with the release of a new report from the Nebraska Farm Bureau, according to an article on The Hill.
The grassroots farmers organization released their estimate of the cost of the president’s trade war on Nebraska’s agricultural industry and came up with an astonishingly high total of around $1 billion.
“Retaliatory tariffs make our U.S. products more expensive for international customers, meaning they buy less or buy from someplace else,” Nebraska Farm Bureau President Steve Nelson told the Omaha World-Herald yesterday. “This report provides a clear picture of how much we’ve lost due to those tariffs and the need to improve our trade relations,” he said in what many Nebraska farmers surely saw as the understatement of their lives.
While the study did not offset the estimate of the state’s agricultural sales losses with the amount of emergency federal payments that the Trump administration authorized to farmers who have suffered because of its tariff policies, it does demonstrate the scale of the damage that those policies have caused, particularly since the Market Facilitation Payments to affected farmers comes from American taxpayers rather than overseas agricultural customers.
Corn, soybeans, and pork exports have been decimated by the trade conflicts, according to Jay Rempe, a senior economist at the Nebraska Farm Bureau.
“The total loss in Nebraska farm revenues due to the retaliatory tariffs ranges from $695 million to $1.026 billion so far in 2018,” Rempe said. “That’s roughly 11 to 16 percent of the export values of Nebraska agriculture goods in 2017.”
Besides the losses attributable to lost farm exports Nebraska has also suffered a loss in labor income associated with agriculture, leading to a total economic loss of between $859 million and $1.2 billion to the state.
“To put a $1.2 billion loss into perspective, every person in the state of Nebraska would need to contribute $632 to cover that volume of lost dollars. That’s a significant hit to our state’s economy,” Rempe said.
With the president’s trade war flying in the face of traditional Republican free trade advocacy, the Nebraska Farm Bureau is urging a return to pre-Trumpian policies, including the elimination of steel and aluminum tariffs and open, frictionless trading agreements. It called for “continued and growing access to world markets for commodities and products produced by Nebraska farm and ranch families.”
The report demonstrates the political dangers that President Trump’s radical break with decades of American economic policies can bring to the Republican party’s future electoral fortunes. It also shows how little the people in the states that voted for Trump and put him in the White House have gotten back for their ill-fated decision.
Hopefully, they now know better.
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Original reporting by Justin Wise at The Hill.