The latest escalation of the Trump-China trade war has led to an iron door slamming shut.
On Tuesday, the Chinese Commerce Ministry announced that China will no longer be buying American agricultural products, a decision with huge, wide-ranging implications. Zippy Duvall, president of the normally conservative-leaning American Farm Bureau, called the decision a “body blow” to American agriculture.
The Chinese decision is a response to two moves from Donald Trump and his administration. The first was a surprise announcement, made by Trump, that the US would begin instituting a 10 percent tariff on about $300 billion worth of Chinese goods. This came following a series of trade negotiations that press officers in the Trump administration described as “productive,” but Trump tweeted that China had reneged on promises to purchase certain American agricultural products (without specifying what those might have been).
Then, on Monday, Treasury Secretary Steven Mnuchin formally labeled China as a currency manipulator due to a drop in the value of the yuan. The move is largely symbolic, but also nearly unprecedented, and seen as mostly an open-handed slap in the face to China.
In response, it appears, came the Chinese government’s tactic to halt the purchase of American agricultural goods. China’s targeting of American agriculture has the benefit, in China’s perspective, of being both a large and a political attack. China imports billions of dollars of American agriculture, being the largest importer of American soybeans and a top-three importer of American pork; overall, China is the fourth-largest importer of American agricultural goods. But attacking American agriculture also serves as a de facto attack on Trump, who is perceived to draw support from rural America.
This will be yet another insanely heavy burden on American farmers, who have dealt with fallout from the trade war for over a year, in addition to swine flu, floods, droughts, and heat waves.