Trump, trade, tariffs, and China – I’m sure you’ve heard any number of combinations of these words over the past few weeks, but what does it all mean?
The short answer: China plans to add a 25% tariff, or tax, in response to a planned U.S. tariff on Chinese goods.
The U.S. exports many products to China such as wine, fruits, tree nuts, and pork. Soybeans are our largest export commodity, and China is our largest customer. Last year, $129.89 billion of U.S. goods were imported to China (source).
Why is the U.S. planning a tariff on Chinese goods? What started this trade war?
One reason is from back in 2011:
A group of Chinese nationals dug up genetically engineered seeds from an Iowa corn field and planned to send them back to China, so they could be reverse engineered. Those seeds, the result of years of research and millions of dollars of American investment, now stand as one of countless pieces of evidence in the case against China for intellectual property theft and unfair trade practices (source).
Trump’s tariff is a response to China’s poor trade relations. Agriculture is not the only industry to suffer from China’s “bullying” behavior. Other industries include: aerospace, biotechnology, robotics, and autonomous vehicles.
Of course, there is much more to it than this. For farmers, 20 cents of every dollar relies on trade. That’s a lot of money to gamble in trade, especially when we all know farming is a gamble to begin with. So while “China might underestimate the strength and resolve of American farmers,” the President does not. “And he will not allow our agricultural producers to suffer because of China’s continued bad actions” (source).