It was one week after President Trump declared phase one of his China trade deal a “landmark,” and Jim Heimerl, one of Ohio’s biggest pig farmers, was struggling to hide his disappointment.
“We thought tariffs were coming off, but today, we don’t know what’s coming off,” he said in the office where he oversees a business that produces 750,000 pigs a year. “That’s what’s so disappointing. When will tariffs be coming off?”
“Not yet,” is the answer, leaving farmers across the Midwest wondering how long they will be expected to live on the front line of Trump’s trade war with China.
This corner of Ohio, in western Licking County, is Trump country. More than 62% of voters backed the Republican candidate in 2016, helping him land the state by a narrow margin. He will need the farm vote again in November if he is to hold the key battlegrounds of Ohio, Wisconsin, and Pennsylvania.
A central plank of his campaign this time around rests with two trade deals, the USMCA, covering North America, and the agreement with China, which both have farm products at their heart.
In a speech to farmers in Texas over the weekend, Trump claimed his administration helped increase farm incomes by $30 billion dollars, or almost 50%, in three years, even before the deals kicked in.
“The deal with China will tear down market barriers and pry open vast new markets for American beef, pork, poultry, seafood, soybeans, rice, dairy, infant formula, animal feed, biotechnology, and much, much more,” he said.
Phase one of the deal commits China to buying an extra $12.5 billion of agricultural goods from the United States this year and $19.5 billion in 2021.
But, seven days after the announcement, Heimerl, who stepped down as president of the National Pork Producers Council last year, was picking over the words delivered by China’s chief negotiator in the East Room of the White House who said the purchases would be “in line with market terms.”
“So, how much will agriculture actually get? Soybeans have to be competitive, and Brazilian beans are much cheaper,” he said.
And then there are the tariffs that China hiked two years ago as the trade war escalated.
When Heimerl went to the White House to talk trade on behalf of the nation’s pig farmers, he had a simple message for the administration’s negotiators. “We’re at the tip of the sword, and we can only bleed so long. Agriculture lives and dies on trade.”
China had a 12% tariff on imports of American pork but increased it by an extra 50 points as the two countries traded punitive levies. Economists at Iowa State University estimate the cost to producers at about $8 per animal.
That puts a strain on farmers such as Heimerl, who employs 90 people and whose pigs are fattened at hundreds of facilities dotting from one side of the state almost to the other, at a time when he sees an opportunity. African swine fever is blamed for wiping out half of China’s national herd and driving up prices.
“There’s a lot of people banking on China,” he said. “I hope it’s not a long shot and that it is close to coming in.”
That means Trump and his hardball tactics retain his support, despite uncertainty about when “phase two” might happen.
“I do give him credit,” he said. “The problem with China didn’t happen overnight, and I guess he’s not going to fix it overnight. Somebody has to stand up to China.”
About 26% of American pork is exported. Getting deeper into Chinese markets and pushing that number to 30 would not only help farmers stay in business but would roll back the trade deficit with Beijing, he added.
Troy Balderson, the son of the farmer who represents Ohio’s 12th District in Congress, said the numbers show the value of agriculture to the U.S. economy and the importance of getting China to lift its restrictions.
“Manufacturing is always the talking point and how it has been affected by tariffs, but the largest impact is agriculture,” he said. “Manufacturing is not even close to that 30%.”
There has been some relief for grain growers in the state, however. Elijah Duncan, chief financial officer of Fishburn Services half an hour to the north in Morrow County, said the deal would help end recent volatility in corn prices.
Grain produced on the company’s 6,000 acres goes mostly for ethanol production in the U.S., but China’s huge presence in global markets meant it affected domestic prices. Markets surged at the end of last week, he said, in the wake of the deal, pushing prices up by 3 1/2%.
“That’s huge for us in farming because the margins are so tight,” he said.