Montana’s Farmers Fear Being Caught in the US-China Trade War Crossfire

Farmers across Montana are increasingly concerned that the spillover of increased tariffs on wheat exports to China could have devastating consequences on their businesses. With China levying increased tariffs on US exports to the Far East in retaliation to President Trump’s self-enforced tariffs on America’s own Chinese-manufactured imports, it appears that this is having both a direct and indirect impact on Montana’s farming industry.

Lyle Benjamin, president of the Montana Grain Growers Association, insists the market has barely picked up in 2019 since 2018 tariffs threatened to wipe out all profits derived from Montana’s wheat exports to the People’s Republic. Mr Benjamin described the ongoing US-China trade war as an “ugly time for Montana farmers” and those located nationwide due to the knock-on “trade uncertainties”.

The trade war has created a fascination in foreign currency even among people who have no idea what forex is about and how price movements on one currency against another can have a lasting impact on both local and global business sectors. Despite President Trump’s insistence that China needs exports to the US more than America needs exports to the People’s Republic, the Chinese yuan has been a consistent riser against the US dollar in the last five years, moving from around 6.10 yuan to the dollar in 2014 to over 7 yuan to the dollar at the time of writing.

An economist of Montana State University believes that issues in the farming of soybeans can actually have a knock-on effect on Montana’s wheat industry. Vincent Smith admitted that the soybean industry, which has been particularly affected in the Midwest by rising export tariffs from China, is beginning to hamper wheat farming in Montana. Smith said that the fall of corn prices means that the value of “the lowest quality wheat” in the US “tends to fall”. Subsequently, Smith believes this has a “ripple effect on all wheat prices”.

Montana appeals to President Trump to bring an end to uncertainty

Montana’s farming and agricultural organizations are desperate for the President to bring an end to the trade war and put a stop to the economic uncertainty. Earlier this summer, the Montana Farm Bureau sent a letter to the Trump Administration imploring him to take hard-working farmers nationwide into consideration. John Youngberg, executive vice president of the Montana Farm Bureau, admits that the “pain is becoming real” for many Montana farms.

A former US senator, Max Baucus visited Missoula in October to discuss the ongoing trade war and the effects of tariffs on Montana’s wheat. Baucus, who previously held the role of US ambassador to China, admitted that the impact of such trade policies could harm people in farming communities for generations to come.

Since his time in politics, Mr Baucus has established the Baucus Institute at the University of Montana, designed to educate citizens about the current state of the global economy and its likely future. Politicians, lawyers, academics and students regularly convene at the Institute to contribute to the national discourse, engaging on problem-solving and policy-making for future generations.