President Donald Trump’s trade war is starting to affect livelihoods in the heartland.
In Poplar Bluff, Mo., Mid Continent Nail has laid off 60 workers and expects to cut more if it doesn’t get relief from Trump’s steel tariffs.
Midwestern farmers, meanwhile, are reeling from tariffs that China announced last week on $50 billion worth of U.S. products, including soybeans, pork and chicken. July futures prices for soybeans, Missouri’s most important crop, have fallen almost 15 percent in the last two months.
“We don’t want a trade war,†said Gary Wheeler, executive director of the Missouri Soybean Association. “That’s the worst-case scenario for us and for China.â€
For now, however, a trade war appears to be exactly where the U.S. and its major trading partners are headed. The European Union, Canada and Mexico have announced retaliatory measures in response to U.S. tariffs on steel and aluminum. They have targeted a broad range of products including whiskey, pork and motorcycles.
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Barriers are going up quickly between the U.S. and China. The first tariffs in both directions are scheduled to take effect July 6. Trump is threatening to target an additional $200 billion worth of Chinese products, and if China retaliates again he’s prepared to go $200 billion more. That would place penalties on 90 percent of the in goods that China shipped us last year.
When China announced its retaliatory measures last week, it seemed to be trying to cause as much pain as possible in pro-Trump farming states.
“No doubt, the American breadbasket is front and center and becoming more so,†says Mark Muro, a senior fellow at the Brookings Institution. “The agriculture sector in the Midwest is going to be unhappy and concerned.â€
Brookings estimates that 1.4 percent of Missouri workers, or about 40,000 people, work in industries that will be affected by the Chinese tariffs. In McDonald County in the state’s southwestern corner, home to two poultry plants, 37 percent of workers are employed in targeted industries.
Even before other nations’ countermeasures take effect, Trump’s tariffs are destroying Missouri jobs.
Mid Continent Nail, which employed 500 people in Poplar Bluff until recently, imports steel wire from Mexico. Its orders have dropped by half since Trump applied his 25 percent steel tariff on June 1.
The company has already laid off 60 people and says it will have to cut 200 more jobs by the end of July “unless something changes very quickly.â€
Spokeswoman Elizabeth Heaton said Mid Continent used Mexican wire to compete with nail manufacturers in places such as China. “The price of domestic wire has always been high, and the price has soared since the tariffs went into effect,†she said.
Mid Continent has been forced to raise its nail prices 19 percent, which may make domestic nail manufacturing uncompetitive.
“The cost was always a little higher because we were manufacturing in the United States,†Heaton said. “A lot of customers for whom it was really important to buy American-made products just can’t do it anymore.â€
Mid Continent is seeking an exemption from the tariffs, but thousands of companies have filed such requests and it’s unclear when the Commerce Department will act on them. Sen. Claire McCaskill, D-Mo., brought up Mid Continent’s plight at a Senate Finance Committee hearing this week.
Trump’s tariffs have benefited some people in the region, including 300 U.S. Steel workers in Granite City who were recalled this month. If the trade war continues to escalate, though, it’s clear that the losers will greatly outnumber the winners.