With Delaware soybeans farmers in the crosshairs of a trade war, their support for Trump is tested, persists

Karl Baker | The News Journal

Show Caption Hide Caption Soybean prices changing but not necessarily from the tariffs Jay Baxter, a farm manager at Baxter Farms, talks about the recent soybean tariffs and price changes.

Delaware farmers' broad support for President Donald Trump is being tested after their soybeans were placed at the center of a trade war between the United States and China – one that has seen the two countries impose tariffs on tens of billions of dollars of imported goods.

And, even as soybean prices have plunged nearly 20 percent in two months as a result, many in Delaware's politically conservative farm community say they will vote for the president again.

Georgetown farmer James H. “Jay” Baxter IV said the issue is about more than his 1,000 acres of soybeans. He believes the Trump administration's tariffs could make the U.S. economy stronger, even though it is a point of view shared by few economists.

Unlike those academics, who use broad indicators to determine national wealth, Baxter said a healthy economy is one that must domestically produce tangible products, like steel.

“Even if it does impact my pocketbook, we have to stand for something,” he said. "If we can see the steel mills come back to life again up there in Pennsylvania … then we can see benefits to the economy in that regard, not just the gross national product."

The trade war was sparked in March when the Trump administration placed tariffs on the importation of steel and aluminum from any country. It escalated shortly after when he added $50 billion of various imported goods from China to the tariff list.

The dispute scooped up Delaware's agricultural community when China, the world’s largest importer of soybeans, responded with a 25 percent duty on the U.S. crop, among other tariffs.

Delaware farmers in 2017 harvested more than 8 million bushels of soybeans, making it the state's second largest crop. Most of the beans are used for chicken feed in the state's large poultry industry.

Increasing tensions again, Trump on Friday said he’s prepared to impose tariffs on all $505 billion in goods that China imports into the U.S. if the trade war escalates further. The president has argued that the trade imbalance between the United States and China harms Americans and is a result of bad trade deals.

Many economists say that the United States' importing of about $375 billion more from China than it exports is a sign of economic strength that benefits American consumers.

They also argue that escalating trade fights with China, as well as Canada, the European Union and Mexico could reduce economic growth by more than a half of a percentage point and employment by hundreds of thousands if all the duties and retaliatory measures are imposed.

Rick Dickerson, a Laurel-area farmer, said Trump needs to be given the same freedom to negotiate trade deals that past presidents have enjoyed. But he hopes the president has an end game to his strategy "because I don’t think we can handle it for the long term.”

"I don’t think, as farmers, we want to see the president’s hands tied,” he said.

Asked if he supports the tariffs, Dickerson said, "Sometimes you gotta play hardball."

"You can’t back right out right after you’ve done something like that,” he said.

Still, because of the trade dispute, Dickerson said he opted to plant baby lima beans in his fields this summer rather than soybeans.

“With the price being down like it is and the uncertain marketplace, I got on the phone and I started calling around," he said. “I was able to get a baby lima bean contract ... We’re lucky in this area that we have some options.”

The farmers also have said the current uncertainty is not entirely because of the soybean tariffs. Dickerson noted that Congress has yet to pass the farm bill. Baxter said a wet spring has local farmers worried about potentially low crop yields here while Midwestern states harvest a bumper crop.

“That has more of an effect on prices than anything,” Baxter said. “If these tariffs affect demand, we’re also affecting supply because of such a good yield because of such good weather in the Midwest.”

After China's soybean tariffs went into effect earlier this month, Delaware's congressional delegation sent a letter to U.S. Agriculture Secretary Sonny Perdue, arguing that Trump's trade policies "have serious implications for the livelihoods of soybean farmers in our home state of Delaware."

In a tweet on Friday, Delaware's U.S. Sen. Chris Coons reiterated the sentiment, saying the Trump administration's "trade wars are hurting farmers in Delaware."

Actually, Mr. President, earlier this year, soybean prices were over $10.50 a bushel. Since you announced trade actions against China, and China responded w/ tariffs on soybeans, they have plunged to less than $8.50 a bushel. Your trade wars are hurting farmers in Delaware https://t.co/3yGYCOSslR — Senator Chris Coons (@ChrisCoons) July 20, 2018

Baxter said Delaware's politicians shouldn't be "putting words in our mouth."

“I do respect them for who they are and what they do, but I think they’re talking for the other side of the aisle,” he said, noting that all three Delaware members of Congress are Democrats.

Still, the Delawarean who is perhaps the most influential in agriculture politics nationally agrees with the members of Congress.

Greenwood farmer Richard Wilkins said if President Trump is trying to fix a trade imbalance, he should take measures that don't sacrifice the exact U.S. exports that keep the trade deficit from growing larger.

"Why would you do something that’s going to hurt something that’s giving us any kind of balance at all?” Wilkins asked. "Agricultural products are the largest share of what our balance of trade with China is. It’s $28 billion a year."

Wilkins insists that China does manipulate soybean markets, and the United States should file a complaint with World Trade Organization.

"Time and time again, you’ll see them canceling orders for agricultural products," he said. "And then the marketplace reacts and the marketplace corrects, 10 percent, 20 percent, 30 percent, so the marketplace has a drop in value. And then guess what China does? They decide to buy it."

Imposing tariffs forces farmers to shift crops when one becomes unprofitable, Wilkins said, and that throws off the supply and demand of other crops.

"If shifting to other crops causes a shifting of supply of those commodities, well then the price of those commodities is going to suffer also," he said.

China's retaliatory tariffs have boosted agricultural business in Brazil, a key competitor of American soybean farmers, Wilkins said.

“In the long run, adopting protectionist trade policies damages your reputation as a trading partner,” he said.

A populist stand

In addition to running his farm in lower Delaware, Wilkins in 2016 was president of the American Soybean Association, an organization that has spent $770,000 on lobbying the federal government since Trump became president.

In that role, he was in China on a trade mission just after Trump had been elected and Chinese government officials were eager to know what it meant for their global business.

He told them that the campaign had been more populist than any he had ever witnessed. It was punctuated with anti-trade comments from Trump advisers as well as frustrated voters who perceived the political system was not responding to their needs.

Trump “rose to popularity because people, especially in the countryside, were very frustrated with big corporations and very wealthy people controlling things," he said.

Now, he said, Trump voters are like a car owner who purchased a new vehicle that has rapidly broken down.

“You live with the denial because if you were to go back and say, ‘I made a mistake,’ well, that's not in human nature," he said.

Baxter disagrees.

He believes the current trade dispute is the first stage of a lengthy process to realign global markets in a way that is more favorable to the United States.

"We’re trying to get stuff back in line, he said. "So I have to respect the president with what he’s trying to do."

Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.

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