A new round of import taxes between the U.S. and China has Indiana’s agriculture and manufacturing industries — and even some of President Donald Trump’s fellow Republicans — worried about the escalating trade war’s impact on Hoosier farmers, companies and consumers.

Trump last week raised tariffs from 10 percent to 25 percent on many goods and commodities imported from China, worth about $200 billion. The Chinese government responded this week by announcing additional taxes on U.S. imports worth about $60 billion, to take effect June 1.

The Chinese tariffs are a threat to farmers, who have already seen exports decline after China imposed taxes as high as 25 percent on crops such as soybeans — Indiana’s top international export. With the tariffs in place, China has sought commodities elsewhere, leaving U.S. farmers without a big market and leading to a steep drop in prices.

“China is one of our huge buyers of soybeans, and we produce a lot in Indiana,” said Robert Kelly, the Purdue Extension director in Elkhart County. “If China continues to put tariffs on our agricultural products, they can go to another country and buy it for cheaper. That makes our supply higher, which makes it less valuable.”

Soybean prices this week dropped to $7.55 a bushel, a 10-year-low, after the trade war heated up again.

If prices keep dropping, it could put farmers in a hole because their costs of doing business — from buying seed and fertilizer to renting land — tend to remain static or increase, even as they get less income, Kelly said.

One St. Joseph County farmer, Larry Enders, said he saw corn prices drop from about $3.77 per bushel last week to $3.28 after the talk of tariffs, though the price had since rebounded to $3.55. He was glad the president was going after China, despite the effects on farmers.

Copyright © 2019, South Bend Tribune