TARIFFS AND BAILOUTS

The painful reality of tariffs is its harmful effects.  If a country puts a tariff on your goods you are selling and you are in a global market its effect is a tax on the buyer. What transpires is retaliation.  China trades with the world. The Trump Tariffs on China’s electronic goods created reciprocal tariffs on U.S. produced Soybeans and Kentucky whiskey. China then went to the world market and has developed alternate sources for soybeans – Brazil.  This alternate source generated losses for our farmers and thus Big Agra demanded a bailout.  To date (2019) Big Agra has benefited to the tune of a 19 Billion dollar bailout, this all without congressional approval.  This bailout is larger than Obama’s Auto Industry bailout.  Obama’s bailout was paid back by the Auto industry and approved by congress.  The only way Big Agra can pay back Trump is to keep him in office.

Now that China has an alternate source will they require as much of our soy crop or any of our crop from now on?  Record numbers of small farmers have declared bankruptcy for the last two years, and the comment from the Trump administration when confronted with these facts was “go big or get out”. 

This attitude is detrimental to the health of our food crop diversity.  Large farms tend to specialize in genetically modified crops that are cross bred for optimal shelf life, color, size, shape and in some cases they enhance taste.  This also creates the same environment as the potato famine in Ireland.

  Does the Trump administration continue the annual bailout or demand Big Agra plant alternate crops?  If it does, can the bailout after the first year be considered an illegal unproportionate tax for the benefit of electing Trump?  Agricultural markets are price sensitive to the extreme with world markets.

So, agricultural tariffs increase prices to the buyer and acts as a tax, create bankruptcies, picks winners and losers, and generates less crop diversity. Trump’s tariffs on China generate higher prices for our purchase of electronics, most of which are produced in China without an alternative.  So who suffers? Tariffs on Kentucky whiskey makes alternative whiskey relatively cheaper in China.  Looks like the Trump tariff strategy is a loser for the United States.

This also highlights some of the other acts Trump has taken toward China.  The Obama administration organized and negotiated the TPP (Trans Pacific Partnership).  This pact helped to diversify the supply of electronics, reign in China’s economic pressure on the region, and keep China in check.  These efforts were scrapped by Trump.