For a time, it looked like President Donald Trump’s trade wars would cost him support among Louisiana’s farmers.
China, in particular, had responded to Trump’s tariffs on Chinese-made goods by imposing tariffs on $100 billion of agricultural products from the United States, and that caused U.S. exports to plummet.
But at least temporarily, China is now buying more of Louisiana’s biggest crop, soybeans, compared with the depths of the trade war in 2018. And the Trump administration has given farmers billions of dollars to offset losses from his trade policies and win their favor.
Small towns and rural areas throughout Louisiana are expected to power Trump to victory in Louisiana on Nov. 3, as they did in 2016.
Trump’s agriculture policies “have paid off,” said Jackie Loewer, a rice, soybean and crawfish farmer outside Crowley in Acadia Parish. “His personality is pretty hard to take. But I do like his policies.”
One thing Trump doesn’t discuss is how the U.S. tariffs amount to a tax increase on U.S. companies and consumers since they have to pay more for Chinese goods.
Trump had repeatedly complained during his 2016 campaign that the Obama administration was allowing China to engage in “the greatest theft in the history of the world,” as he put it at one point.
Once in office, Trump scuttled U.S. participation in the Trans-Pacific Partnership, a 12-country trade pact aimed at countering China’s rising dominance in the Far East. He argued that the deal, backed by progressive groups as well as the U.S. Chamber of Commerce and the manufacturing lobby, was too complicated and “a rape of our country.”
Trump launched a trade war in 2018 by imposing tariffs on $360 billion of Chinese goods that the United States imported. He predicted that the unilateral move would shrink the U.S. trade deficit with China and lead companies to bring manufacturing jobs back to the United States.
China, predictably, imposed its own set of tariffs on American goods. That suddenly meant Chinese companies would have to pay sharply higher prices to import American farm products.
So China switched to buying Brazilian soybeans, said Michael Deliberto, a professor at LSU’s Agriculture Center.
U.S. soybean exports, which largely go to China, tumbled by 18% from 2018 to 2019, and benchmark prices fell from a 2018 high of $10.61 per bushel to a low of $8.14 per bushel in May 2019.
Those developments especially hit Louisiana’s soybean farmers, who export all of the soybeans that they harvest. Louisiana producers of corn, pecans and dairy products also suffered. Rice growers remained unaffected, however, because most of their product is sent to Mexico.
Exports from the Port of New Orleans to the Far East, which mostly includes China, dropped by 8% in the first eight months of 2020 compared with a same period in 2019, said Robert Landry, the port’s vice president and chief commercial officer, pointing to tariffs and the coronavirus as two major factors.
But the picture for soybeans farmers, in particular, has brightened this year after the Trump administration reached a deal for China to purchase $200 billion more American products.
“As a result, you’ve seen some large purchases in the second half of 2020,” said, Andy Brown, national affairs coordinator and assistant commodity coordinator at the Louisiana Farm Bureau. He cautioned, however, “They are one-time purchases and not guarantees in the future.”
Exports to China from the Port of South Louisiana are increasing, said Paul Aucoin, the port’s executive director.
“China is trying to rebuild their poultry and swine herds,” Louisiana Agriculture Commissioner Mike Strain said, noting that most of the soybean purchases will feed chickens and pigs. “They are going to buy a lot of products. China has got to buy from us. They are the largest importer of food in the world.”
Soybeans now sell for about $10.50 per bushel.
“China is coming back to the table, either out of necessity, or we have a price advantage over Brazilian soybeans,” Deliberto said.
The price increase is not benefitting all Louisiana soybean farmers yet.
Frank Burnside, for example, sold his 2020 crop in advance this year for less than $9 per bushel because he did not foresee the recent price increase.
“My crystal ball was not too sporty,” said Burnside, who farms in Tensas Parish in northeast Louisiana. “But we’re in it for the long run. We’ll end up being in a better place for next year.”
Burnside called Trump’s trade policy “worthwhile. It ended up accomplishing the goal to move more product into China.”
However, Stephen Norman, a pecan grower near Alexandria, has little good to say about the president after China jacked up its tariffs on U.S. pecans from 7% to 47%.
“China had become a huge consumer of American pecans, but the following fall, they imported zero from the U.S.,” said Norman, who farms 100 acres. “Trump’s stupid trade war crushed farmers in the United States. Our prices were cut in half. China is buying from other countries. It’s not likely we’ll get that business back even when the tariffs are removed. We’re now trying to market pecans in India.”
But Norman hastened to add that many pecan farmers will vote for the president this year.
“There are a lot of Trumpers who believe he can do no wrong,” he said.