SCOTT SIMON, HOST:
President Trump's 10% tariff on Chinese products took effect this week. China responded with retaliatory tariffs on some U.S. products, including coal and liquefied natural gas. President Trump also contended with China in his first term. China placed steep tariffs on U.S. products then, too. According to the USDA's economic research service, those tariffs caused nearly $26 billion in agricultural export losses from 2018 through 2019.
A 2024 study by the National Corn Growers Association found that if China's tariffs expand to U.S. corn and soybeans, American farmers could pay the costs. Josh Gackle is a soybean farmer and chairman of the American Soybean Association. He joins us from the road in North Dakota. Thanks very much for being with us.
JOSH GACKLE: Thank you, Scott. It's good to be with you.
SIMON: Are you concerned?
GACKLE: Yes, absolutely. I think we know what happened in 2018 in the first round of tariffs and the trade war and retaliatory tariffs from China. It directly affected farmers' bottom line. And if we can learn something from history, we can expect that should further tariffs be put in place on China or other countries, that they will retaliate as well. And it seems to be that U.S. agriculture is one of the first targets that gets their attention when they look to do those things. So, yes, generally, a lot of concern in farm country.
SIMON: What happened to you in 2018, may we ask?
GACKLE: There was an immediate impact, you know, on the market. We saw within the first few days of the retaliatory tariffs from China in 2018 nearly a $2 drop when it comes to soybeans in the cash price that we were able to receive. And we were able to get through that at the time, and the administration put in place the market facilitation program, which tried to fill some of that gap. But farmers, in general, would like free and fair trade and open markets where we can sell our products rather than having to rely on government payments, which is what happened back then, and it didn't make farmers whole. It was a Band-Aid approach. It was temporary.
And we saw long-lasting impacts from that trade war as well. China and other countries made investment in infrastructure and purchasing products from other countries, our main competitors, mostly in South America, Brazil and Argentina. So those long-term impacts from that first trade war, we're still dealing with that. If it gets extended now or if it increases, it would spell more trouble.
SIMON: What do you hear from other corn and soybean farmers now?
GACKLE: I think we hear a lot of the same thing. I mean, it's no secret that rural - you know, a lot of support for President Trump in rural America. Farmers are hoping that mostly this is a negotiating tactic, and the Trump administration is going to be, through this process, able to engage with international buyers in other markets and find some new trade deals. But it's a really big risk. In 2018 and '19, there was more of a cushion for farmers on our balance sheets and working capital and that type of thing.
But commodity prices over the last two to three years have dropped significantly, 30- to 50%, depending on the commodity. Nearly every crop that we are planting in 2025, none of them show a profit on paper. So the cushion that we had in 2018 and 2019, we don't really have right now, and the margin for error and the risk that we're facing going into this 2025 growing season is more extreme than it was back then.
SIMON: How do you feel about President Trump's statement that some people might have to bear some costs for tariffs but that they're temporary, they'll be over and will make the whole system stronger when they're done?
GACKLE: Well, I'm hoping that's correct. I think that he's right on that. The time frame for that to happen, you know, if things were to improve and we find new markets, that's well down the road - two, three to five-year process - maybe to see some of those benefits. And I think there's not a lot of room in farm country, and a lot of farmers right now are going in to see their lenders. You know, most farmers have to get a significant line of credit, an operating loan, to put in a crop for any growing season.
Those discussions are happening now, and I know that there's a lot of concern not just with the farmers and the producers that are putting the crop in but with the lenders that we work with. You know, if there's some benefit from this trade war, we may not see that in time to get through the next couple of years.
SIMON: Josh Gackle, who is a soybean farmer, also chairman of the American Soybean Association. Mr. Gackle, thanks so much for being with us.
GACKLE: Thank you. I appreciate it. Transcript provided by NPR, Copyright NPR.
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