The other day, I stumbled across a story that perhaps helps to explains America's tribalism and apparent obsession with Donald Trump. Caleb Ragland is a soybean farmer from Kentucky. He farms 1,500 acres of the high protein crop and is also chairman of the American Soybean Association with 500,000 members across the US. ASA members produce far more soybean - twice as much - than the domestic market needs. Exports are therefore vital. China took 52% of US soybean exports in 2024. It is their largest overseas market by a considerable margin. He has written an article about his industries problems HERE.
Mt Ragland is desperately concerned about how Trump's tariffs strategy will affect him. China has responded to America's 145% tariff on Chinese imports with 135% tariff of their own on American imports.
Back in 2018 China applied a 25% tariff on soybeans in response to Trump hitting $50 billion of Chinese goods with a similar 25% tariff. Consequently US Soybean exports to China fell by a whopping 75% although an outbreak of African swine fever among China's pig farms didn't help. Brazil was the winner. As imports of US soybean exports fell, Brazil's increased.
Ragland says soybeans are around $10 a bushel now but just three years ago, they were $17 a bushel (about 27kg). But that was a spike. The price was $10 a bushel or lower during Trump's first term.
The American farm economy is much weaker now than in Trump's first term. Soybean exports lost nearly 10% market share in China that was never recovered. He is right to be worried. China will only buy American soybeans at +135% if they are truly desperate. Soybeans are used mainly for animal food in China. They will source it elsewhere or find alternatives. That market will disappear for US producers.
The curious thing is Mr Ragland voted for Trump in 2016, after which he created havoc for him and his fellow farmers by imposing tariffs on China, their main export market. The president then signed a deal with China that inter alia committed China to purchasing $200 billion more in US goods and services than they had in 2017. Experts say this was very strange, something never seen before or since in a bilateral trade deal. I should say this is how it reads from the US side, I don't know what the Chinese thought they were agreeing to.
Anyway, in the end, according to one expert: "China actually bought none of the additional $200 billion of exports that it promised in the agreement." China did ramp up its purchases of US agricultural products, but when it comes to buying US products and services overall, it still hasn't even returned to the levels it bought from America before the trade war began. I am not surprised. How can you force another country to buy your stuff? Opening up your market is one thing but setting minimum monetary targets is, let's say a bit odd. But do expect more of this as Trump extorts more countries with less power than China in the coming weeks.
Mr Ragland blames Joe Biden for not enforcing the "pretty weird" deal. Despite the damage done in 2016-2020, he voted again for Donald Trump and watched when the losing candidate launched an insurrection as he refused to leave office.
In the 2024 campaign Trump talked endlessly about imposing new and larger tariffs but Raglan trotted off to the ballot box and cast his vote, not for Harris but once again for Donald Trump! He is now begging Trump to reach a deal with China with fears that he will be out of business next year. He even writes:
"President Trump announced that he would pause retaliatory tariffs on countries willing to negotiate. To me, this is a sign of the president’s good faith. The 125 percent tariff on China still holds, but Trump’s making it clear: They can still come to the table and walk away with a deal that benefits both countries."
After all that's happened over the last ten years, this farmer still supports Trump and the Republicans. He talks of Trump's "good faith." For Heaven's sake! It's very hard to find any sympathy for him.
This is all about American exceptionalism. They genuinely believe they don't have to abide by normal rules. It isn't enough to try and be competitive on world markets but that issuing threats to customers that they must buy your produce even if they don't want to is the right approach.
It's also about American stupidity. Mr Ragland could have Googled 'tariffs' at any time since 2017 and got access to any amount of factual data showing how tariffs are far more likely to damage trade than promote it. Finding the truth has never been easier or quicker in human history but millions in the USA chose to believe the word of a known con man.
The FT only this week says that the US, not others, will feel most pain from its economic mistakes.
Hitler and tariffs
Timothy Ryback is an author of several books about Nazi Germany. A few months ago, on 9 January, he wrote a piece for The Atlantic recalling how Adolph Hitler dismantled the German constitution in just 53 days. It was an allegory about Trump, although Trump’s name never appeared in it.
Ryback now has another article, this time about Hitler’s strategy on tariffs: Hitler’s Terrible Tariffs. Again, in my opinion it’s allegorical. Trump isn’t mentioned once but it’s pretty obvious who Ryback is taking aim at and why.
Germany had even less reason to raise tariffs in 1933 than America has now. Back then it had what the German Industry and Trade Association said was: “…the largest export surplus of all major trading countries” and they warned of countermeasures hitting exports.
Nevertheless, Hitler wanted tariffs on agricultural produce to slash imports.
Hans Joachim von Rohr, who worked at the Reich’s nutrition ministry, went on national radio to explain the logic of Hitler’s tariff strategy. “The products that Germany lacks must be made more expensive; then farmers will produce them in sufficient quantities.” It all sounds so simple doesn’t it?
The primary targets of the Hitler tariffs—the Scandinavian countries and the Netherlands—were outraged by the sudden application of tariffs, in some cases rising by 500%. With its livestock essentially banished from the German market, Denmark, for example, faced substantial losses. Farmers panicked. The Danes and Swedes threatened “retaliatory measures,” as did the Dutch, who warned the Germans that the countermeasures would be felt as “palpable blows” to German industrial exports. That proved to be true.
Soon Hitler's foreign minister was telling Hitler: “Our exports have shrunk significantly,” and "our relations to our neighboring countries are threatening to deteriorate.” His finance minister forecast that the agricultural sector would require an additional 100 million reichsmarks in deficit spending.
This is exactly what Trump will be forced into doing.
