A 2018 trade war had high costs for Michigan farmers.
The U.S. Department of Agriculture reports in a new study that tariffs on agricultural exports led to $27 billion in trade losses with Michigan farmers losing out on $277 million.
In 2018, President Donald Trump first imposed tariffs on steel and aluminum over concern about national security risks. This kicked off a trade war with a series of retaliatory tariffs from China and five other regions on American meat, dairy and other food products.
“China had been a pretty strong export market for Michigan agriculture up to that point, and we definitely saw a big slide after the announcement of the retaliation,” said John Kran, national legislative counsel for Michigan Farm Bureau.
Soybeans, a major export to China, were the biggest victim of the trade disagreement. They accounted for nearly 71% of the losses from mid-2018 through 2019, the USDA reports.
In Michigan, where 105 million bushels of soybeans were produced in 2020, the USDA estimates tariffs led to a $223 million decline in soybean exports. Other major trade losses included nearly $19 million in dairy products, $11.5 million in pork, $13 million in processed and fresh fruit and $5.7 million in corn.
Other Midwest states, like Illinois and Iowa, felt the biggest punches with each losing $1 billion in soybean exports.
After the “phase one” U.S.-China trade deal deescalated the clash in early 2020, Michigan agricultural trade has “crept back up,” Kran said. From 2019 to 2020, Michigan agricultural exports increased nearly 19% from $18.2 billion to $2.16 billion, according to the Michigan Department of Agriculture and Rural Development, including $112 million in products to China.
“Michigan’s food and agriculture export numbers haven’t been this high since 2014,” said a May 2021 statement from Jamie Zmitko-Somers, director of MDARD’s Agriculture Development Division.
The phase one agreement, which expired on Dec. 31, 2021, required China to purchase $200 billion in American goods over two years. Kran says he hopes Michigan Farm Bureau can work with the Biden administration to extend “the wins” achieved by phase one.
“Hopefully find some more opportunities for Michigan agriculture,” he said.
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