President Trump said he would remember “the forgotten men and women of this country.” Instead, he has prompted the Chinese to give those folks careful thought.
China is retaliating against Trump’s threat to impose high tariffs on Chinese imports by threatening to impose high tariffs on U.S. products produced in rural areas known as Trump Country. One of those areas is North Carolina, a swing state Trump carried by nearly four percentage points thanks to his solid support outside of urban counties.
Now those rural voters who sent Trump to shake things up may be wondering how things are shaking out. Some things that could be rattled are the markets for key North Carolina exports to China: tobacco, soybeans and pork. All would face stiff mark-ups in the China market should the tariffs go through.
Overall, China is North Carolina’s third-largest trading partner behind Canada and Mexico. It’s the largest consumer of North Carolina tobacco, buying more than $156 million in leaf tobacco in 2017. It’s also a major buyer of North Carolina soybeans, and it buys about 3 percent of North Carolina’s pork products. All face new China tariffs of 25 percent.
Larry Wooten, president of the North Carolina Farm Bureau, said the Tar Heel state will get hurt if a trade war starts with China. “This is troubling, to say the least, in terms of tobacco,” he said. “When you add pork and soybeans, it really hits North Carolina.”
The Washington Post reports that soybean-producing counties went for Trump by a margin of more than 12 percent and soybean tariffs by China will hurt those counties. Those counties include some in North Carolina where the state has as 1.6 million acres planted with soybeans. China buys 60 percent of U.S. soybean exports.
Trump supporters hope all this is only a Trump negotiating ploy and he will make a deal before China deals a blow to their local economies. Certainly there’s plenty of evidence that Trump makes claims he doesn’t follow through on.
But when it comes to international trade, no threats by the United States are idle. The talk of higher tariffs has already unsettled global financial markets and introduced uncertainty in investors. From there, real events and reactions can occur and markets can go in directions no nation can control.
The chance of the tit-for-tat tariffs escalating is increased by Trump’s impulsiveness and the weakness of his advisers. After turnover in his Cabinet and staff, the president is without a secretary of state. He picked his chief economic adviser on the basis of his TV performances. Trump’s new national security adviser prefers belligerence whether it’s bureaucratic infighting or international posturing. Trump’s treasury secretary goes along with whatever he boss wants. There is little experience, judgment or independent thinking between Trump and a bad decision on trade.
Some farmers and manufacturers in North Carolina have been hurt and some have been helped by an increasingly global economy. The solution to the losses isn’t to try to take the economy backward to a former trade balance, but to engage the economy as it is and shape it in favor of U.S. consumers and producers, importers and exporters.
Instead, Trump is inclined to dismiss every effort at balancing the global economy – from NAFTA to the Trans-Pacific Partnership to the Paris accord – as deals that rip-off the United States. But refusing to enter into agreements — or withdrawing from existing agreements — leaves only escalating disagreements.
Economic conflicts are not good for trade or the economy. They’re not good for the sale of tobacco, soybeans or pork products. And they are not good for “the forgotten men and women of this country.”