Photo: Agriculture in Indian Country is a $3.3 billion industry. (Mark Trahant photo)
Life is about to get more expensive. The trade war with China means that prices will spike on hundreds of products ranging from steel to bacon.
This is Trahant Reports.
President Donald Trump campaigned on the issue of trade. He said as a candidate: “We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world.”
Now that he is in office? He said we shall soon know if the United States will be successful in its attempt to rewrite trade rules.
The trade war is one that is fought with a tariff. It’s a tax that the United States charges businesses that import goods from China. And China, in retaliation, then charges its tariff on goods sold by American companies to that country. The problem that the Trump administration would like to resolve is that China sells far more products to the United States.
A tariff makes the price of the import more expensive, in one theory, gives domestic producers an advantage. Only that is not what is happening. Soybean prices, for example, are at the lowest point in more than a decade.
Agriculture is a $3.3 billion industry in Indian Country. That is made up of both crop sales and livestock both of which will see reduced international sales during a trade war.
Another area that impact tribes and tribal enterprises is the cost of construction. The cost of raw materials, especially steel, is going up. Steel is the most common material used in construction of hotels, casinos, and other commercial buildings, accounting for about 16 percent of a building’s cost.
Of course the administration is hoping that China will back down and reach a trade deal with the United States before June when these new taxes begin. And trade policy is one of those issues that defies party politics. More than a few Democrats agree with the president on this one issue.
Some see slowing trade as a good thing for the climate. A report by the United Nations said there is a connection between climate change and trade. More trade means more emissions of greenhouse gases. The UN said a better route is for international cooperation, on trade and climate.
In the meantime a trade war will mean a higher price for everyday products that are produced in China. Retailers ranging from Target to Home Depot said consumers will pay higher prices soon because of these new trade taxes. About a quarter of the shelves of a WalMart store are stocked with things from China. Most food is produced locally, but bedding, clothing, toys, and much, much more are part of the global trade network. Last year China accounted for more than 40 percent of all clothes, 72 percent of all footwear, and 84 percent of all luggage and other travel goods imported into the United States.
The bottom line: A trade war means we will pay more taxes on everything we buy.
I am Mark Trahant.