If the U.S. and China don’t solve the trade dispute that began Friday, American soybean farmers could need government aid by fall to ensure their businesses don’t collapse, according to Iowa soybean farmer Ron Heck.
China is the biggest buyer of U.S. soybeans, importing more than $12.4 billion worth of the oil seed in 2017. But in response to a 25% tariff on $50 billion worth of Chinese goods imposed by the Trump administration, Beijing retaliated by slapping tariffs worth $34 billion on 545 American goods -- including soybeans.
The Asian giant is already expected to cancel American soybean imports due to the 25% tariff on the legume and, according to Bloomberg, has already purchased 19 cargoes from Brazil.
“I hope it doesn’t come to that, but it could,” Heck said Friday during an interview with FOX Business’ Dagen McDowell. “Farmers want trade, they don’t want aid.”
Heck said that U.S. Secretary of Agriculture Sonny Perdue promised that if the escalating trade dispute had not been solved by Labor Day, he would put together an aid package to protect the rural economy. Fall is the biggest season for American soybean farmers.
Until then, Heck said the only option for farmers is to wait and see whether the world’s two biggest economies settle the tariff discussions.
“These tariffs are ill-conceived and totally inappropriate,” Heck said. “Using food as a weapon, raising the price of food to the Chinese people and devastating United States’ farmers is a lose-lose situation for everyone.”