When the Dow Jones stock average drops 500 points at the opening bell, as it did Wednesday, it means someone is getting hurt. The market, confused at what a trade war with China might mean, bounced back later in the day, but the pain lingers for thousands of people associated with Missouri and Illinois agriculture. They can thank President Donald Trump for their troubles.
Only a few weeks ago, Trump basked in self praise as the market broke daily records. But he's been silent as trillions of dollars in market valuation have disappeared. Investors crave certainty; Trump's decision to launch a trade war targeting China created a fog of uncertainty.
China announced retaliatory tariffs against 106 U.S. export items that include pork and soybeans. Rural voters in Missouri and Illinois who supported Trump may now have second thoughts.
Missouri is second only to Iowa in pork exports to China. Nearly 15 percent of Missouri pork exports are sold to China annually, according to Forbes magazine. China's planned 25 percent tariff on U.S. pork means producers will have to scramble to revise budgets and find alternative buyers.
"Some of our worst fears seem to be coming true," hog farmer Brian Duncan, vice president of the Illinois Farm Bureau, told the Chicago Tribune. "This is significant, real and serious for rural America."
China also is targeting soybeans, aircraft and aircraft parts — all of which could have significant impact here. China is the largest market for the $3 billion in soybeans Illinois exports annually. Soybean futures plummeted 5.3 percent on the Chicago Trade Board on Wednesday morning.
Trump's decision-making process is baffling. He can tweet ridiculous policy decisions based on a TV show he's just watched. He has been known to make snap pronouncements to soothe his own battered ego after being embarrassed by events in a totally unrelated area.
His supporters like this brash, unorthodox style. But real people can suffer enormous consequences. The combination of Trump's tariff decisions and forced renegotiation of the North American Free Trade Agreement now threatens thousands of livelihoods. Corn growers are particularly nervous about the impact that the NAFTA talks could have on their exports to Mexico, this region's largest foreign market.
Trump's tendency to exaggerate, usually to impress his followers, also gives a distorted picture of the problem at hand. He tweeted that the U.S. trade deficit with China is $500 billion when, in fact, it is $337 billion — a still sizable figure. But it speaks to Trump's penchant for overblowing the problem and then overreacting without considering the consequences.
Trump's rural supporters have him to blame for the trade war that now menaces them like a spring tornado. But they have themselves to blame for the votes that put him into office in the first place.
REPRINTED FROM THE ST LOUIS POST DISPATCH
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