President Donald Trump bragged on Sunday morning that “big progress” was being made with China on trade, even as U.S. farmers say they are suffering tremendously as a result of the tariffs he imposed against Beijing.
“Important meetings and calls on China Trade Deal, and more, today with my staff,” he tweeted. “Big progress being made on soooo many different fronts! Our Country has such fantastic potential for future growth and greatness on an even higher level!”
Important meetings and calls on China Trade Deal, and more, today with my staff. Big progress being made on soooo many different fronts! Our Country has such fantastic potential for future growth and greatness on an even higher level!
— Donald J. Trump (@realDonaldTrump) February 17, 2019
The comments were in stark contrast with Trump’s own administration, which has released few details on the negotiations, and has said “much work” is still to be done before any concrete agreements are reached.
“Everyone thinks it’s a stalemate. The president is wishing something there that isn’t and is trying to will it to be,” one analyst who spoke with with U.S. negotiators told The Washington Post.
Meanwhile, U.S. farmers have been hit hard by the trade dispute, which largely stem from Trump’s decision to impose billions in tariffs on U.S. imports of Chinese goods last year. In retaliation for that decision, Chinese officials slapped tariffs on a proportionate number of American goods, including dairy and pork products, and soybeans, the country’s top agricultural export to China.
U.S. soybean sales to China have plummeted approximately 94 percent since then. As a result, many Midwest farmers have had to file for bankruptcy, as they wait for the two countries to hammer out a deal to end the current standoff, which threatens their growing stockpiles.
According to analysis by The Wall Street Journal this month, U.S. growers are filing for Chapter 12 bankruptcy protection “at levels not seen for at least a decade.” Delinquency rates have climbed as farmers are unable to pay off their loans due to the drop in profits.
“I’ve been through several dips in 40 years,” Nebraska farmer Kirk Duensing told the Journal. “This one here is gonna kick my butt.”
Duensing said he had kept operations running until this month by hiring himself out to other farmers, borrowing money at massive interest rates, and selling land and equipment, but was still more than $1 million in debt.
Agricultural lenders say they too have seen a sharp rise in bankruptcies and financial troubles, as banks deny farmers the funds they need to plant spring crops amid the trade war.
“We are seeing producers who are running out of options,” Tim Koch, senior vice president at Farm Credit Services of America, told The Journal.
“We thought 2019 would be the year things turned around,” Curt Hudnutt, head of rural banking for Rabobank North America, added separately, referencing the bank’s farm-loan portfolio, which has been deteriorating over the last year. “Then the trade dispute happened and that really put a damper on things.”
The trade war has lead some farmers to even contemplate suicide, as their profits dry up and their futures remain uncertain.
“The uncertainty, will they survive on the home farm, is [causing] more people to think negatively,” Frank Friar, a retired agricultural lender who advises farmers on financing and bankruptcy for the Wisconsin Farm Center, told The Journal.
Government subsidies, intended to offset the loss from Trump’s tariffs, have done little to ease growers’ fears.
“We don’t want a handout. We want trade. We want to sell the crop,” Illinois soybean farmer Lynn Rohrscheib told The New York Times late last year.
“We were all really supportive [of the president’s decision] at the beginning. We figured we didn’t know all the facts and something would happen and this won’t be a long-term thing. Now it looks like this is going to be a several-year thing and people are getting frustrated.”
Making matter worse is that the subsidy program has distributed only a fraction of its funds since September, when the first half of its promised $12 billion handout was made available. In total, only $838 million has been paid out to farmers affected by the trade war.
Trade negotiators have just returned from China where the meetings on Trade were very productive. Now at meetings with me at Mar-a-Lago giving the details. In the meantime, Billions of Dollars are being paid to the United States by China in the form of Trade Tariffs!
— Donald J. Trump (@realDonaldTrump) February 17, 2019
The program has also been plagued by bureaucracy and “practical challenges,” according to The Times. Growers have been told they must wait until their harvests are completed before applying for a bailout, a process slowed by poor weather conditions in many areas.
And in another blow to the agricultural sector, many federal farm subsidies were halted during the government shutdown, putting already hard-pressed farmers under additional financial duress.
Even as stockpiles grow and decay, and U.S. farmers bear the brunt of the fallout from the president’s trade spat, Trump himself has praised the conflict as the first step toward confronting the U.S. trade deficit, which has notably grown since he took office.
During a Rose Garden press conference intended to announce a national emergency at the U.S.-Mexico border that would allow the administration to divert funds from the Pentagon and elsewhere to build the president’s proposed wall, Trump praised China on Friday for its most recent negotiations with the United States, which include a deal last month to purchase several million tons of soybeans from the United States.
Agricultural experts and analysts, as well as farmers themselves, worry that the purchases may not be enough to put any sort of dent in the record U.S. soybean stockpile that has built up since last year.
The president specifically focused on China’s decision to put fentanyl, a major contributor to the number of deaths from the rising opioid epidemic, on its list of “criminal” drugs, meaning those caught dealing the drug would be given the death penalty.
“President Xi [Jingping] has agreed to put fentanyl on his list of deadly, deadly drugs and it’s a criminal penalty, and the penalty is death,” he said.
“So that’s frankly one of the things I’m most excited about in our trade deal. If you want to know the truth, I think there’s no more important point.”