President Donald Trump and China are on the brink of a trade war — and it seems states which overwhelmingly voted for Trump would bear the brunt of the blow.
As of this week, Trump announced tariffs on about $50 billion worth of imported goods from China. In retaliation, President Xi Jinping also ordered $50 billion worth of tariffs on American imports.
China announced tariffs of between 15-25% on 128 items, which include luxury agricultural products like dried fruit, nuts and ginseng. Around 32 items include specialized steel products used in oil and gas production and transport, in which Chinese state-owned mills have been investing. Other tariffs target pork and aluminum.
Unbeknownst to Trump, the tariffs are going to hurt his own heartland the most.
Iowa, South Dakota and Nebraska rely heavily on grain exports like soya beans and corns and will likely be hit by the trade war. Tariffs on U.S. pork actually help breeders in China, where pig prices are in a slump. However, they will harm Iowa, which produces around 33 percent of the United States pork. It is also home to the U.S. Ambassador to China, former Gov. Terry Branstad.
Ohio, Indiana and Michigan are major producers of autoparts and cars and they will also feel the pressure.
The 15 percent tariffs on ginseng are also expected to harm Wisconsin, which produces 95 percent of the medicinal herbs sent to China. The overharvesting of ginseng wiped out the Asian variant of the herb from the Korean peninsula and north east China. However, a similar plant was discovered in the woodlands of America and since then, the U.S. enjoys a booming trade of it with China. The herb is not longer seen in the wild but is heavily farmed by 140 families in Marathon County, Wisconsin. The “American” ginseng is now also cultivated in north east China and the country has become its world’s largest producer. However, the U.S. branded ginseng still fetches a 30 percent premium in Chinese market, mostly due to its better quality.
Meanwhile, dried fruit and nuts are staple products of California’s Central Valley and it too would be hit hard by the 15 percent Chinese tariff. Farmers there voted overwhelmingly for Trump, despite the state of California as a whole leaning heavily to the Democratic side.
In fact, all of the above states are the ones where Trump won in the 2016 election.
Ultimately, the measures would impact approximately $3 billion in U.S. exports.
The Trump administration has argued a deficit with China means the country is dealing in “unfair trade practices” and should be “stopped.” The president also dismissed concern that his demands for tariffs on Chinese products have the potential of starting a trade war.
We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!— Donald J. Trump (@realDonaldTrump) April 4, 2018
The Trump administration’s proposed tariff won’t take effect immediately and there is still time for China and the United States to back away from their threats. China has said its actions will depend on whether U.S. will move forward with its higher duties. In turn, Trump has said if China doesn’t stop its “unfair trade practice” — whatever they are — the tariffs will be imposed.
For Trump voters, it seems they pinned their hopes on the wrong man.
Banner/Thumbnail credit: REUTERS/Carlos Barria