President Trump’s trade policies have made waves in Ohio's agriculture communities.
As of July and early August, these tariffs ranged from 10% to 41%, with some hitting as high as 50% back in April.
"So we now have very, very high average tariffs, which goes against the history of the United States and trade policy," said Ian Sheldon, the Andersons Chair in Agricultural Marketing, Trade and Policy with OSU Extension.
Historically, Sheldon said, trade policy set general agreements on tariffs and trade, leading to a "progressive reduction in tariffs over time."
Sheldon said the average effective tariff at the U.S. Border is just over 17%, which is the highest the nation has seen since 1935.
“That takes us back to the so-called Smoot-Hawley tariff, which was introduced in 1929 and was often linked with exacerbating the Great Depression," he said.
In response to these changes in the trade market, China has cut its soybean imports from the U.S. to zero.
In May, both the U.S. and China entered into a trade war and tariffs were up even further. The Chinese retaliatory tariff was 147% against U.S. exports and the U.S. tariff against Chinese imports was 135%.
"Basically that was a trade embargo by both sides, those were prohibitive, and even the U.S. Treasury Secretary agreed that they were prohibitive tariffs," said Sheldon. "But both parties backed off. The tariffs right now are running at 30% for China, the U.S. is 57%."
China has historically been the number one export market for soybeans, accounting for about 25% to 30% of the entire crop’s trade.
According to Seungki Lee, an agricultural economist with OSU extension, China used to purchase between 10 to 12 million tons a year.
"So a huge amount of advanced sales happened already at this point, but this year we just see zero sales from China, which is really hitting the market," he said. "And that actually made USDA cut down our export prediction like by 200 million bushels."
As the number five producer of soybeans in the nation, Ohio’s farmers have had to shift their crop sales.
That means rerouting trade to other major importers of soybeans including Taiwan, Mexico, Indonesia, Egypt, Bangladesh and Vietnam.
"Finding other export channels and developing it, that will be a valuable investment. Because I think this move is not really just coincidentally [happening]," said Lee. "This is actually a little bit of a structured move or a decision of China, which wants to just move away from being involved with the U.S. food supply chain."
Kirk Meritt, executive director of the Ohio Soybean Association, said Ohio’s farmers face other challenges in addition to trade issues.
“Prices have decreased for the crops that the farmers sell to levels we haven't seen in many years while the input costs for growing the crop have continued to stay high. So it's already a very challenging situation for farmers," he said.
Lee also commented on dropping prices at this year's Farm Science Review, saying these are challenging times for many farmers.
"USDA cut the season average price of soybeans to be $10 per bushel, which might be below some of the farmers' break-even point," he said.
Meritt said he is hopeful that the recent agreement that the Ohio Soybean Council, the Ohio Department of Agriculture and the Ohio Corn and Wheat Growers Association signed with Taiwan could strengthen trade partnerships.
"Taiwan's always been a really strong market for us and we're looking to grow that," he said. "So we're very hopeful that the agreement that we signed and the ongoing partnerships that we are able to form with with a country like Taiwan can lead to to growth and more demand from them."
Because more than half of Ohio’s crops are exported, Meritt said farmers must diversify their market to survive.
"Farmers are eternal optimists," he said. "They are willing to take risks, business risk, and certainly mitigate that risk, but they're entrepreneurs and they want to sell their crop into a market that hopefully allows them to be profitable."
Ohio’s soybean producers are also looking at selling their crops for biofuels and livestock feed for a more sustainable profit.
"The soy diesel market has been a significant source of growth for demand so we hope that that can continue to be the case," Meritt said.
"We also sell soybeans, the protein from the meal to the livestock market. So when consumers eat a hamburger or drink milk or eat eggs, indirectly they're getting healthy soy in their diet as well."
Federal and state financial assistance hasn't come down the pipeline for soybean farmers, but Meritt said he hopes agreements can be made with China to bring them back into the market.
"If that's not the case, then there there might need to be assistance for farmers purely to get them from from this year to the next," he said. "For a lot of farmers, It's a matter of a multi-generational operation."
