China’s decision to halt purchases of U.S. agricultural products could hit Idaho hard, as the trade war between the two countries continues to escalate.
The move comes after the Trump administration threatened a wider expansion of tariffs on Chinese products recently, according to a Bloomberg News report.
China is consistently one of Idaho’s top trading partners, according to Idaho Commerce. In 2018, $417 million in Idaho exports went to China, including $59 million from food and agricultural products.
“The Governor’s office continues to monitor trade talks with China,” wrote spokeswoman Marissa Morrison in an email to the Idaho Statesman on Tuesday. “Due to the developing nature of the negotiations, it is difficult to fully understand how Idaho’s industries, including agriculture, will be affected.”
Idaho’s dairy industry, already struggling with the negative effects of the trade war and Chinese tariffs, stands to lose more than most if China doesn’t resume purchasing food products. China imported more than $38 million in Idaho milk, whey and cheese products in 2017, according to data compiled by the Idaho State Department of Agriculture. That number dropped in 2018, when China added retaliatory tariffs to several Idaho products. There’s currently a 31% total tariff on whey products alone, according to the Idaho State Department of Agriculture.
“Unfortunately, it’s a tough situation to have any sort of influence on,” said Rick Naerebout, CEO of the Idaho Dairymen’s Association. “The (Trump) administration tends to move forward without gauging local or regional impacts on their actions.”
Idaho farms and dairies received $24 million in the last year under a special program meant to help them survive the last round of retaliatory tariffs from China, as well as other countries like Mexico and Canada. But farmers and dairymen across the state received payments that couldn’t come close to what they lost.
Idaho dairy production continues unabated, Naerebout said, but further economic stress only results in more family-owned dairies closing. Naerebout said 20 Idaho dairies have closed so far this year — more than in all of 2018. A number of factors, including a labor shortage, were likely responsible for the closures, but Naerebout said the uncertainty of the trade war had a definite impact. Milk prices were just barely returning to the level that would allow dairies to break even, Naerebout said, after a four-year low.
“We don’t want to get USDA payments,” Naerebout said. “We don’t want to get stuck in the middle of trade disputes. We want to stand on our own two feet and have the industry be successful on its own two merits, not based on politics.”