The Iowa farmers fearing for their livelihoods as China trade war looms
At the Kimberley family farm in rural Iowa, the winter frost has lifted and the next few weeks will bring soybean planting season. “One in every three rows of beans goes to China,” said Grant Kimberley, watching a combine harvester spraying fertiliser across a vast field. But Mr Kimberley, 42, whose ancestors have tilled the soil here since the 1860s, didn’t look confident those exports would continue.
A potentially devastating trade war looms and US soybeans heading to China could face a 25 per cent tariff. The proposed charge hangs like a sword of Damocles over Iowa, a state bigger than England and known as the “breadbasket of America”.
Forty per cent of China’s soybeans – $14billion worth a year – come from the US, and much of that from Iowa. The state is now awash with predictions of economic doom, and anger at Donald Trump for triggering the crisis by putting tariffs on Chinese steel.
Nowhere would a prolonged trade war bring more disappointment than at the 4,000-acre Kimberley farm, which has in some sense become a focal point for Sino-US trade relations.
In 2012, Xi Jinping, who was China’s vice-president at the time and is now the president, visited the Kimberleys – Grant, his father, Rick, and mother Martha – during a tour of the US. He liked the place so much that a replica “friendship farm”, including a copy of the Kimberleys’ house, is being built in China’s Hebei province.
Mr Xi’s connection to Iowa goes back to 1985 when, as a party official, he spent two weeks in the state, researching farming and lodging with an Iowan family. That was his first visit to the US and, according to those who have spoken to him, he retains a deep fondness for the state.
Sadly for Iowa, that also means Mr Xi knows its economic and political importance. In addition to being an agricultural powerhouse, the state holds a special place in the electoral calendar, voting first in primary elections. In the 2016 presidential election, Mr Trump won with 51 per cent of the vote, largely because farmers rallied behind him.
“The Chinese know the Midwest is important to Trump,” said Mr Kimberley. “They’re communist but they know democratic political problems.”
He added: “We had been hoping agriculture would be left out of all this, that it wouldn’t be used as a weapon. I don’t believe [Mr Xi] does want tariffs, but he will protect his country.”
If a trade war lasted until 2020, sending many Iowan farmers out of business, they would make their displeasure known at the ballot box. Sooner, they could abandon Republicans in November’s midterm congressional elections.
While the rest of the world’s attention was focused on Syria, Mr Trump and his agriculture secretary, Sonny Purdue, spent Thursday conducting a rearguard action at the White House, huddling with Republican politicians from farming states. Iowa’s Republican governor, Kim Reynolds, told him tariffs would be “devastating”.
Mr Trump said he “loved farmers” but they would have to take a hit as he tackled the overall $375billion US trade deficit with China. “We’ll make it up to them,” he promised.
Studies have suggested China’s proposed tariffs would reduce US soybean exports to China by 71 per cent. The gap would be filled by South American suppliers, and Iowa farmers are monitoring weather forecasts in Brazil and Argentina.
Meanwhile, Iowa’s pig farmers have been hit by a Chinese tariff that has already come into effect: a 25 per cent levy on pork. The price of an averagesized pig is down from $170 two weeks ago to $125 now.
As he prepared for planting, Mr Kimberley, was determined to remain optimistic. He was sticking with planting soybeans rather than changing to another crop like corn, as some Iowa farmers are considering. And he was confident Mr Xi and Mr Trump could reach a deal.
“I think President Xi understands how important trade is to his country,” he said. “Long term, it’s in their best interests to resolve this as well.
“After Brexit I hope we get a free-trade agreement with you guys in the UK. That might help a bit.”