One sector of the economy that could be affected by U.S.-China trade tensions is agriculture. China recently launched an investigation into U.S. exports of grain sorghum, and American farmers are concerned their livelihoods could be hurt.
CGTN’s Hendrik Sybrandy reports from the U.S. state of Kansas.
Sorghum stalks are on the menu for cattle at Dan Atkisson’s Kansas farm. The crop is a staple of many farmers’ operations, including Atkisson’s, who grows the grain every third year.
“Sorghum is a very drought-tolerant crop,” he explained. “We can usually take more bushels off a field per inch of water with sorghum than we can with anything else.”
It is mostly used for livestock feed, and most of America’s export go to one prime customer.
China first began buying U.S. sorghum in 2013, and has imported $6 billion worth of the grain since then. Three-quarters of America’s sorghum exports now go to China.
“We have a commodity they want at a price they’re willing to pay for it,” Atkisson said. “It’s been a real mutually beneficial trade situation for both of us.”
U.S. President Donald Trump slapping tariffs on Chinese solar cells — starting at thirty percent. The tariffs are expected to go into effect February 6, 2018.
But that trade situation is in flux. Just weeks after the U.S. announced tariffs on solar panels – many of them made in China – Beijing announced an investigation into claims the U.S. subsidized sorghum farmers, allowing them to sell their products in China at a loss.
This has rattled sorghum farmers like Stephen Bigge. “I’ve never truly faced a potential of anything like this,” he worried.
Bigge’s family has grown sorghum for over 70 years, and his entire farm revolves around the crop.
He and many others in Kansas – America’s top sorghum producing state – have benefited from China’s emergence as an export market, with farm incomes rising along with the crop’s price. When news of China’s probe first broke, sorghum prices dropped by roughly 20 percent. Those prices have since recovered, but farmers are still nervous about the future.
“Whenever you take a market away from a grain producer, that ultimately is going to drop your value, so as my bottom line is affected, yes, I am concerned,” Atkisson said.
Trade with China accounts for nearly 8 percent of the U.S. state’s GDP. That’s one of the largest shares seen by any American state.
A sorghum tariff is one possibility.
“By imposing retaliatory tariffs, you get the attention of the Trump administration,” Don Mayer of the University of Denver’s Daniels College of Business explained of a potential Chinese move. “You tell them this is not as simple and straightforward as the President might think.”
A tariff could raise prices for Chinese sorghum buyers as well, however, who could look elsewhere for supplies. China’s investigation could take a year.
“We’ll cope with whatever we’re dealt as a producer,” Bigge said.
That’s always been a farmer’s mindset, in an industry where so much is out of their control. Trade issues with a country far beyond the horizon being just the latest example.