Mike's Minute: The bad side of the tariffs are coming home to roost

So soybean farmers, like a lot of American farmers, are having a very tough time of it. 

Soybean farmers particularly so because most of their product goes to China. So far this season, China has bought no beans. 

A lot of countries, when they can, are doing business with other countries and avoiding the American tariff regime. 

China in particular is caught up in an ongoing shambles around trade generally, so China has gone to Argentina for their soybeans. 

This has left the people of Minnesota, where most of the beans are grown, with a problem. 

If you remember when Trump announced the tariffs, the tariffs had no downside, apart from a little pain at the start. His words: "a little pain". 

I'm assuming losing your biggest soybean customer is the "little pain" bit. 

Anyway, the White House’s response to this is a massive bail out. Farmers all over America from beans, to wheat, to corn are going to get money because they can't sell their products. 

In a country like New Zealand, none of this will come as any surprise given we have been basically tariff free for years and we do business on the very simple basis that it costs what it costs to make something and you sell it to willing buyers for what the market can bear. 

Need I introduce the butter story at this point? 

The problem in some cases is if the tariff or barrier is too high into a market you look for other markets. This is happening a lot in food. 

By the way, it's also reported Trump is looking at some kind of major carve out around car production as well, given there is no car that is truly American made and they told him this at the start. 

So the tariffs arrived, the prices went up, and the demand went down. 

I'm assuming even Trump can see that a farmer who grows something that he once sold to the world to make a living but now can't because he has been priced out of the market, does not a good economic story make. 

And when said farmer then has to earn an income from the Government, not the market, something about the Trump tariff plan doesn't seem to be working. 

But then there was no shortage of people pointing that out earlier this year. 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Soybean farmers. Let me tell you the story. Like a
lot of American farmers at the moment, they're having a
very tough time of it now, soybeans particularly so because
most of their product goes to China. So far the season,
China has brought no beans. A lot of countries when
they can are doing business these days with other countries
and avoiding, of course, the American tariff regime. China in
particular is caught up in an ongoing shambles around the trade. Generally,

(00:22):
so China's gone to Argentina for their soy beans. This
has left the people of Minnesota, where most of the
beans are growing, with a problem. Now, if you remember
when Trump announced the tariffs, the tariffs had apparently no
downside apart from a little pain, a little pain at
the start, remember that there would be a little pain.
I'm assuming losing your biggest soybean customer is the little

(00:43):
pain bit. Anyway, the White House response to this is
a massive bailout. Billions farmers all over America, from beans
to wheat, the corn, are going to get money because
they can't sell their products. Now in a country like
New Zealand, none of this will come as a surprise,
given we've been basically tariff free for years, and we
do business on the very simple basis that it cost
what it costs to make something, and you sell it

(01:03):
to willing buyers for what the market can bear. Need
I introduce the butter story at this point. The problem
in some cases is if the tariff or barrier is
too high into a market, you look for other markets.
This is happening a lot in food. Trump, by the way,
is also it is reported, looking at some kind of
major carve out around car production as well, given there
is no car that is truly American made, and they

(01:26):
told him this at the start. So the tariff's arrived,
the prices went up, the demand went down. I'm assuming
even Trump can see that a farmer who grows something
that he once sold to the world to make a
living but now can't because he's been priced out at
the market does not a good economic story make and
Wed said farmer then has to earn an income from
the government, not the market. Something about the Trump tariff

(01:48):
plan doesn't seem to be working. But then there was
no shortage of people pointing that out earlier this year.

Speaker 2 (01:54):
For more from the mic, asking Breakfast. Listen live to
news talks. It'd be from six am weeked or follow
the podcast on iHeartRadio