Amid the media driven and obsession with impeachment hearings this week, let’s not lose sight of the ever growing tension between U.S. and China. The ongoing trade war between China and the U.S. was popular news a few months ago as negotiations picked up and then stalled again, and so on. Unfortunately the divide between our two countries is no closer, and it is something everyone should be paying constant attention to.
Henry Kissinger, former U.S. Secretary of State, and long-time political giant, recently indicated that conflict with the U.S. and China is inevitable and would be catastrophic beyond any of the world wars. Pretty bold and unsettling statement to make, and it is coming from a 96 year old, but you could still argue that Kissinger is still pretty dialed in. Regardless, most people are aware of the constant trade battle between each country. Trump has continued to increase the level of tariff’s on China imports, while China aims to match those same tariffs on U.S. exports. And round and round we go, but what is becoming evident now is that American farmer is taking the biggest hit.
China has recently curbed their purchase of $50B agricultural goods, livestock, and crops as the ongoing trade war continues. This figure has been repeatedly publicized by Trump as a flagship deal he made with the Chinese in the Oval Office. Unfortunately, the Chinese are claiming to have never committed to such a dollar figure. The root of this conflict is obviously driven by the tit for tat tariff battle between both countries. As a result, Caterpillar and Deere have had to start laying off workers and cutting jobs.
Trump needs to be wary of losing the working class farmer that he promised to make America great again for. For a man who prides himself on deal-making, now is the time to make a deal with China, as this is seemingly just the tip of the iceberg of the impact this can have on American exports. Farmers are feeling the initial effects, but you’d have to imagine this will continue to spill over across a wide range of industries as this dispute continues. Let’s just hope that Kissinger’s words of catastrophe do not prove prophetic from an old man still firing quotes out there.