South Bend Tribune (16/05/2019) - A new round of import taxes between the U.S. and China has Indiana’s agriculture and manufacturing industries — and even some of President Donald Trump’s fellow Republicans — worried about the escalating trade war’s impact on Hoosier farmers, companies and consumers.

Trump last week raised tariffs from 10 percent to 25 percent on many goods and commodities imported from China, worth about $200 billion. The Chinese government responded this week by announcing additional taxes on U.S. imports worth about $60 billion, to take effect June 1.

The Chinese tariffs are a threat to farmers, who have already seen exports decline after China imposed taxes as high as 25 percent on crops such as soybeans — Indiana’s top international export. With the tariffs in place, China has sought commodities elsewhere, leaving U.S. farmers without a big market and leading to a steep drop in prices.

“China is one of our huge buyers of soybeans, and we produce a lot in Indiana,” said Robert Kelly, the Purdue Extension director in Elkhart County. “If China continues to put tariffs on our agricultural products, they can go to another country and buy it for cheaper. That makes our supply higher, which makes it less valuable.”

Soybean prices this week dropped to $7.55 a bushel, a 10-year-low, after the trade war heated up again.

If prices keep dropping, it could put farmers in a hole because their costs of doing business — from buying seed and fertilizer to renting land — tend to remain static or increase, even as they get less income, Kelly said.

One St. Joseph County farmer, Larry Enders, said he saw corn prices drop from about $3.77 per bushel last week to $3.28 after the talk of tariffs, though the price had since rebounded to $3.55. He said he was glad the president was going after China, despite the effects on farmers.

“When Trump talked about tariffs, the prices of our products took a nosedive,” Enders said. “I’m glad Trump is doing it, but I just wish it wouldn’t hurt us so much, the farmers.”

In 2018, Indiana’s exports of grain and oilseeds, such as soybeans to China, dropped to $238 million, compared with $1.1 billion the year before, according to a report from the U.S.-China Business Council. China imposed tariffs on U.S. soybeans in April 2018.

At the same time, manufacturing industry lobbyists worry the higher U.S. tariffs on thousands of Chinese products could raise costs for American manufacturers that rely on the goods and, ultimately, consumers.

“It’s gonna hit our state moreso than maybe others because so many parts and components of stuff that’s assembled in Indiana are exported from China,” said Andrew Berger, senior vice president of government affairs for the Indiana Manufacturers Association.

Some manufacturers may be able to avoid an immediate cost hike by placing their largest orders before the taxes take effect, or because their prices are already locked in through existing contracts, Berger said. But long term, he said, companies would have to absorb higher costs, mitigate the increases through contract negotiations or pass the costs on to customers.

The impact on farming and manufacturing has led some Republicans in key states to complain about Trump’s tactics against China.

Locally, U.S. Rep. Jackie Walorski, R-Jimtown, has criticized the broad tariffs on Chinese goods, such as parts used by northern Indiana factories. She has pushed a bill that would allow companies to get exemptions from the taxes.

“We should be using a scalpel, not an ax, when it comes to who’s going to be impacted by these tariffs,” Walorski said by phone Wednesday. “(Northern Indiana has) the largest manufacturing district in the country now, we export so many things. ... If you look at ground zero, it’s definitely our district and our state.”

Another member of Indiana’s congressional delegation, U.S. Sen. Mike Braun, did not directly criticize Trump during a conference call with reporters this week, but said he would support the type of government “bailout” the president has proposed for farmers if the trade standoff continues.

“Farmers, all of us know that they’ve been hurting,” Braun said. “I think most farmers have been weaned off subsidies and government involvement, but in the process of dealing with the Chinese, even though I don’t like it philosophically, hopefully we’d come to help them if we’re still at an impasse.”