Despite President Trump’s promises that China would absorb the cost of his trade policies, the bulk of the cost has been absorbed by American businesses and consumers.
That’s according to investment bank Goldman Sachs, which recently issued an analysis finding that China has not lowered prices on exports to compete in American markets, despite hopes that it would following the administration’s wave of tariffs on Chinese goods. Instead, the cost has fallen “entirely” on American businesses and everyday American shoppers in the form of higher prices — especially after American producers “opportunistically” increased prices as a result of the trade war, according to Goldman Sachs.
The note from Goldman Sachs comes on the heels of news that American soybeans are trading at their lowest price since before the Great Recession. According to Bloomberg, soybean futures are now trading for just $8 a bushel following an announcement from China that there will be new tariffs on U.S. imports beginning June 1. This could lead to some shipments to China being cancelled prior to delivery.
If one were to believe its surrogates, rather than change course, the administration appears to be doubling down. In a recent interview on CBS This Morning, Senator Tom Cotton (R-Arkansas), a consistent acolyte for President Trump, admitted that while there was “sacrifice” on behalf of everyday Americans, those higher prices pale in comparison to the sacrifices made by fallen troops overseas.
“You can’t compare those two sacrifices,” host Gayle King told Cotton.
"There will be some sacrifice on the part of Americans, I grant you that. But also that sacrifice is pretty minimal compared to the sacrifices that our soldiers make overseas that are fallen heroes or laid to rest," @SenTomCotton on trade war with China pic.twitter.com/lqlEZtaeBs
— CBS This Morning (@CBSThisMorning) May 13, 2019
According to a 2018 study by the Walton Family Foundation, Cotton’s home state of Arkansas is bearing a particularly significant cost of the administration’s ongoing trade war with China in comparison to other states.
Farmers who grow soybeans, corn, cotton, and rice have been hit especially hard by import tariffs China imposed in response to Trump’s tariffs on Chinese goods. That study found that crops grown in abundance in Arkansas are all subjected to Chinese tariffs. As Grit Post has previously reported, the growing trend of farmers filing for bankruptcy appears to be in direct response to the hardship they face over the trade war.
Counties in Arkansas’s Delta region were among the highest crop values per capita… Soybeans are Arkansas’s top crop, and it’s the second-most exported crop from the U.S., according to the U.S. Department of Agriculture’s National Agriculture Statistics Service (NASS). Arkansas soybean farmers harvested 3.5 million acres in 2017, and the crop has a value of $1.74 billion, according to NASS. Farmers had yields of 51 bushels per acre, NASS reported.
Of course, tariffs aren’t the only thing the Trump administration promised other countries would pay for. As has been previously reported, the Pentagon is shifting $1.5 billion from U.S. Army personnel budget accounts toward building a wall along the U.S./Mexico border, despite Trump’s repeated promises that Mexico would pay for the wall.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.