China is not buying North Dakota Soy Beans
Summary:
Farmers in Cass County, North Dakota have prospered for decades by growing and selling soybeans, most of which are shipped across the Pacific Ocean to consumers in China. However this year, sales have declined by nearly 94% as a result of tariffs from the ongoing trade war between the US and China. Trump claims that these tariffs will help revive the American steel and auto industry, however, it coming at a high cost for other industries such as agriculture which rely heavily on foreign markets. The North Dakota soybean industry was originally created by Chinese demand for the beans and has rapidly continued to grow rapidly for the past few years. Last year, there were 6.4 million acres of soybeans in the state, as compared to the 450,000 acres in the mid 1990s. As the state’s production of soybeans increase, companies have invested millions on machinery and infrastructure. In addition, public health officials in North Dakota are concerned about the impact of falling prices, which has led to a recent rise of suicides, particularly among young farmers with high levels of debt. Currently, the US is losing potential profit margins to other countries that grow their own soybeans, such as Canada, who are shipping their soybeans to China at higher prices and then buying American beans at lower prices to meet domestic demand.
Discussion Questions:
1. Is the Trade War ultimately good for the US?
2. Has Trump's tariffs been effective as a "tool" to force changes in America's economic relationship with China?
3. Is it right to promote one industry at the cost of another?
4. How has foreign competition played a role in the decline of the North Dakota soybean industry?
Link:
https://www.nytimes.com/2018/11/05/business/soybeans-farmers-trade-war.html?action=click&module=Top%20Stories&pgtype=Homepage
No the trade war is not good for the US in the long run. Currently it is damaging both local producers who have to pay import tariffs on raw goods, while local suppliers have to pay export tariffs to any country retaliating in this trade war. While yes, it is a tool, so is a sledgehammer, which is hardly an incredible endorsement of diplomatic nuance, because yes this will definitely incite action from China and other foreign countries, these changes will most likely be retributions into a fully fledged trade war, as we're already seeing. The problem is that the economics of the situation won't change. We can't renegotiate a trade deficit, because that's just a way of showing how much we import from countries, which is to be assumed for such a developed nation that we focus less on physical export businesses. Now less efficient foreign industries can fill a niche in the Chinese market, because they can now compete will more expensive American imports due to tariffs.
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