State agriculture department unsure how Trump tariffs will affect farmers

Updated: Jul. 6, 2018 at 6:55 PM CDT
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MONTGOMERY, AL (WSFA) - The United States hit China with $34 billion in import tariffs Friday, prompting immediate retaliation by China on American exported products. The tariffs affected Alabama's top agricultural export: soybeans.

China put a 25 percent tariff on soybeans, but it is still unclear what will happen. However, in one scenario it could harm farmers if the trade dispute prolongs.

The tariffs could result in higher exporting costs for soybeans. This could produce a surplus if another country cannot replace Chinese soybean imports.

John McMillan, the Commissioner for the Alabama Department of Agriculture and Industries, said this is a "pocketbook issue" for farmers and could hurt their incomes.

If there is a surplus in soybeans, farmers would not get paid. On the other hand this surplus would decrease the cost for soybeans such as items like soy milk, oil, and tofu.

In a different scenario, McMillan said other overseas markets might open up. The U.S. Department of Agriculture is projecting the U.S. will have more exports globally. This means another country may buy the Alabama soybeans.

"So maybe it's not going to China, but it's going to India, or somewhere else," McMillan said.

He said there are sometimes rising demands for soybeans elsewhere. This could happen with countries where the economy is picking up.

However, the commissioner said it is still difficult to tell what will happen right now. It is a waiting game.

"I think the best thing for all of us to do is take on kind of a wait and see attitude and hope that some of these things get worked out to the advantage of all of our producers and manufacturers and the United States," said McMillan.

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