KS Republicans back Trump’s tariff proposal. Why experts fear trade war could hurt farmers

One of President-elect Donald Trump’s biggest campaign promises — asserting sweeping tariffs on imports coming to the U.S., with higher sanctions on goods from China — could have unintended consequences for Kansas’ economy, experts say.

The escalating trade war that could result from the tariffs would likely spell economic uncertainty in the years to come, especially for farmers across the state.

Trump has said he plans to juice the U.S. manufacturing industry by imposing an across-the-board 10% or 20% tariff on all imports, as well as a 60% tariff on all goods from China. The proposed tariffs would make it more expensive to buy things from China, in theory encouraging companies and consumers to purchase goods made in the U.S. instead.

Republicans assert that the threat of Trump’s proposed tariffs could be enough to pressure America’s trade partners into offering more favorable terms for U.S. exports.

But experts say those efforts could also come at the expense of American consumers and producers — in particular farmers — if China resumed its own tariffs on U.S. imports.

China would be expected to raise tariffs on American goods in response, which would make it more expensive for Chinese companies and consumers to buy them. That could hurt Kansas farms that sell huge amounts of wheat, soybeans and corn to China.

“At least a dozen estimates on Trump’s proposed tariffs show they will have a harmful effect on the American economy, supporting the standard view among economists that tariffs reduce trade and distort production, leading to lower standards of living,” wrote Erica York, research director at the non-partisan, business-friendly nonprofit Tax Foundation.

China is Kansas’ fourth biggest international trade partner behind Mexico, Canada and Japan. According to state data, Chinese buyers spent $423 million on Kansas agriculture products in 2023.

“I would observe that that’s a lot of money and that’s a lot of tax revenue and that’s a lot of jobs,” said state Rep. John Carmichael, a Wichita Democrat, during a special committee meeting on foreign trade in Topeka earlier this week.

John Addessi, a business advisor with the Kansas Small Business Development Center, told lawmakers that if implemented, Trump’s new tariffs would result in higher prices down the supply chain.

“We import a lot of stuff from China, so those costs are going to go higher. Businesses are already realizing they’re going to be paying higher costs for inputs, and they’re going to be passing that on,” Addessi said. “On the other side, other countries are also going to be imposing tariffs in a retaliatory fashion, and that’s going to make our goods less competitive.”

‘A negotiating tool’

Republicans on Monday rejected a proposal offered by state Rep. Rui Xu, a Westwood Democrat, who suggested that the full Legislature should consider sending a letter to Trump and Kansas’ congressional members advising against any tariffs that would harm the state economy.

“We’re all kind of dancing around it, but I think it’s unquestionable that the proposed tariffs by the incoming president would have really damaging effects to the Kansas economy,” Xu said.

Sen. Virgil Peck, a Havana Republican, said no such letter would be taken seriously.

“A lot of things the feds could [do] or even we do sometimes negatively impact the state of Kansas. So unless that part is removed, that’s sort of a poison pill for me,” Peck said.

Rep. Sean Tarwater, a Stilwell Republican, called Trump “a shrewd negotiator” and said it would be “a bad move to undercut what most of the United States has voted for.”

“The last thing we need to do is to somehow diminish that capability or give the idea that Kansas isn’t solidly behind the president,” Tarwater said. “When he talks about, when the (incoming) president talks about tariffs, he uses them as a negotiating tool.”

Voters in 100 of Kansas’ 105 counties favored Trump over Vice President Kamala Harris in this year’s election. Xu said the fact remains that a disruption in international trade relations could be “devastating to Kansas and the country.”

“I would imagine many of you in this room supported and are happy that President-elect Trump won the election. But bad policy is bad policy,” Xu said. “For a committee called foreign trade, I think we should probably address the single biggest thing that could affect Kansas foreign trade over the next four years.”

Lingering effects of trade war

After initiating tariffs on Chinese steel and aluminum imports in 2018, Trump signed an agreement in early 2020 that eased tensions and allowed for most trade to resume.

“That basically allowed ag products to go into China at a much lower reduced, almost insignificant trade with the trade tariff. And then semiconductors and some of the aluminum came back into the United States, so we saw a boost,” said Kelsey Olson, Kansas’ deputy secretary of agriculture.

Biden has kept the 2020 agreement in place, adding new tariffs on Chinese semiconductors and electric vehicles in May.

Vincent Amanor-Boadu, a professor in Kansas State University’s department of agricultural economics, said that even though the U.S. eased some of the restrictions, China has worked to diversify its agricultural imports since the Trump administration’s first round of tariffs in 2018 in order to rely less on U.S. products.

“In the agriculture environment, one of our biggest competitors for the crops that we grow here is Brazil, and then of course there’s Canada and Australia for wheat and corn,” Amanor-Boadu said.

Now, China, which buys more than 60% of the traded soybeans in the world, has come to rely more heavily than before on Brazil, where large swaths of pasture land and native vegetation have been converted for crop production. Since 2016, the share of China’s soybean imports from the U.S. has dropped from 40% to 18%, according to Chinese customer data.

“We’ve still not got back to the same trade, export levels of soybeans to China that we had before the trade war (in 2018). Brazil stepped up and so we never fully recovered that part,” said Scott Gerlt, chief economist at the American Soybean Association.

His organization and the National Corn Growers Association jointly produced a study estimating that renewed trade hostilities between the U.S. and China could be expected to drop the combined economic output for American corn and soy by between $4.9 billion and $7.9 billion annually.

Gerlt said he worries about the long-term chilling effect that a protracted trade war could have on U.S. relationships with other countries that rely on American agriculture imports.

“Reputation matters. I mean, everyone wants a reliable supplier,” he said.

Feds making up for farm losses

Farmers took a hit after the Trump administration’s previous trade war, and the federal government needed to fill in those gaps. In 2018 and 2019, the U.S. Department of Agriculture issued roughly $23.5 billion in payments to compensate farmers for market losses sustained because of Chinese counter-tariffs.

“I talked to farmers at that time about the federal relief, and Kansas farmers are very market-oriented,” Amanor-Boadu said. “They will tell you that ‘I would rather make my money from the market than get it from the government.’ The federal relief was a compromise.”

An analysis of the federal subsidy by other professors in K-State’s department of agricultural economics found that most farmers were made whole through the USDA payments.

“Farm income didn’t go down in 2018 and ‘19. And the majority of that’s because of those payments,” said professor Jisang Yu.

“I want to be a little bit careful here because what we see in the data and what people and the farmers in the United States actually felt might be different. In the data, either the USDA data or our Kansas Farm Management Association, it would suggest that [federal subsidies] did compensate or to some degree it did more than the actual damage.”

If the second Trump administration moves forward with its tariff plan and China retaliates, farmers will once again find themselves at the mercy of the federal government and its ability to dole out aid payments to offset the multi-billion-dollar loss in production.

U.S. Sen. Roger Marshall told The Star farmers should have no doubt that the Trump administration will make them whole for any hardships brought on by trade conflicts.

“I sat down with President Trump a couple weeks ago. He told me, he looked me in the eye and said I love farmers, I’m going to do everything I can to make sure that the American farmer is taking care of, and I absolutely believe that he’ll use those tariffs as a weapon to bring jobs back to this country,” Marshall said.

“What the farmers need right now is the price of diesel fuel to come down. They need interest rates to come down. That’s what’s killing them.”

If hostilities reignite, everyday Kansas consumers could also expect to pay more than they’re used to on commercial goods, Amanor-Boadu said.

“When I became a U.S. citizen, the lapel pin of the American flag that Citizenship and Immigration gave me was made in China,” he said.

“For Kansas consumers, a lot of our non-food imports, the electronics and those things that we have traditionally imported from China, we expect prices to go up, which means that if we are still going to consume those things at the same level that we have been consuming them, then we have lower disposable income for other things that we want to consume.”

The Star’s Daniel Desrochers contributed reporting.