Trump, Harris Industrial Policies' Winners & Losers

When Donald Trump took office in 2017, he pulled the US out of a big free-trade deal with Asia. Later Trump, who calls himself“tariff man,” imposed tariffs on washing machines, solar panels, steel and aluminum, followed by tariffs on a broader array of Chinese products.

Candidate Trump is promising tariffs that dwarf those from his presidency – 60% on all Chinese goods, 10% on all imports from other countries.

Recently he suggested 20% was possible. These would represent dramatic increases in the tariff level – America's currently average about 3% – and in the breadth of industries covered, from a few to all.

Some industries might get special protection. At one rally Trump promised a 100% tariff on foreign-made cars .

As for Kamala Harris, she hasn't talked much about the issue but many experts expect she'll build on President Joe Biden's industrial policy. That would have her relying less on tariffs and more on

• subsidies,
• tougher buy-American rules for government purchases and
• research.

Like Biden, she's less likely to support and protect metal-bending industries, and more likely to shower favors on high-tech industries such as semiconductors and environmentally sensitive industries such as electric cars. Again, her tariffs aren't likely to be as high or broad as those Trump is touting; subsidies are likely to be the focus.

These are predictions and predictions don't always come true. Economists are warning that Trump's proposed tariffs would be a disaster; maybe they'll prevail on him to do something less drastic. Harris's silence leaves her especially free to confound the forecasters.

But if the predictions turn out to be reasonably accurate, the implications for agriculture in Harris's industrial policy are probably minimal.

True, America's trading partners are unhappy about our subsidies for manufacturers and our buy-American rules, and some will respond with similar measures of their own. But those measures will most likely leave US agriculture unscathed.

Tariffs are another matter. Trading partners are almost certain to retaliate with tariffs on US exports – and to aim those tariffs at export-dependent US industries, including agriculture.

The American Farm Bureau Federation says exports account for about 20% of what U.S. farms produce, measured by value. For some crops, including soybeans, the percentage is much higher. When trading partners cut their purchases or even stop buying, commodity prices fall.

When China retaliated against Trump's tariffs, 2018 US ag exports to that country fell by more than half from 2017. And when Trump upped the ante with new tariffs in 2019, China stopped importing US farm products altogether for a while.

Sign up for one of our free newsletters

• The Daily Report Start your day right with Asia Times' top stories
• AT Weekly Report A weekly roundup of Asia Times' most-read stories

New and bigger tariffs could provoke a reaction that's even harder on US agriculture. Last time, then-president Trump made up some of farmers' losses by dipping into the Commodity Credit Corporation kitty. He could do that again, but if his tariffs are bigger this time the retaliation will likely be bigger as well. There are limits to how much damage the CCC will cover.

As Trump points out, the US has for extended periods in its distant past imposed big tariffs in the name of promoting manufacturing. And if whopping tariffs brought about an American manufacturing renaissance, many Americans would say they're worth it.

But that renaissance is far from guaranteed. What's nearly certain is that in the short run, trading partners will retaliate, and US agriculture exports will be among those in the crosshairs.

Former longtime Wall Street Journal Asia correspondent and editor
Urban Lehner
is editor emeritus of DTN/The Progressive Farmer.

This
article, originally published on August 22 and now republished by Asia Times with permission, is © Copyright 2024 DTN/The Progressive Farmer. All rights reserved. Follow
Urban Lehner
on
X @urbanize

Already have an account? Sign i Sign up here to comment on Asia Times stories OR

Thank you for registering!

An account was already registered with this email. Please check your inbox for an authentication link.