We tell our kids not to waste food, but our governments are wasting shocking amounts of it thanks to tit-for-tat tariffs.
Many in the USA are celebrating the harvest with a Thanksgiving dinner today. When it is over, many people will carefully pack up the leftovers because nobody wants to waste good food. Meanwhile, all over the USA, farmers are leaving their soybeans to rot in the field or they are plowing them under. According to Mark Weinraub of Reuters,
This is all because President of the United States started a trade war with China, which usually buys 60 percent of the US crop. In retaliation for the American 25 percent tariff on Chinese imports, the Chinese retaliated with a 25 percent tariff on American soybeans. Then the government rolled out a $12 billion bailout, most of which actually is going to the grain elevator companies, who have cranked up the cost of storage by 40 percent.
In Louisiana, up to 15 per cent of the oilseed crop is being plowed under or is too damaged to market, according to data analyzed by Louisiana State University staff. Crops are going to waste in parts of Mississippi and Arkansas. Grain piles, dusted by snow, sit on the ground in North and South Dakota. And in Illinois and Indiana, some farmers are struggling to protect silo bags stuffed with crops from animals.
According to a report in Axios, some soybeans are being exported to Brazil and Argentina, who then export their own beans to China and use the American soybeans for domestic use. So we have ships going twice the distance, with the Brazilians profiting on cut-rate American soybeans.
This is what you see when you institute tariffs that really mess up the system," said Matt Witte, a commodities expert at Descartes. "You do things like ship soybeans to a country that already produces a lot of them."
In fact, in response to Chinese demand, the new Brazilian government is reducing restrictions on rainforest and savanna destruction to grow more soybeans.
Meanwhile, think about this when you have your cranberry sauce. One third of American cranberry production is usually exported to Europe. But according to the Wall Street Journal, 100 million pounds of cranberries will be composted or used as animal feed.
But in June the European Union put a 25% tariff on U.S. cranberry-juice concentrate in retaliation for U.S. steel tariffs. A month later, China bumped its tariff on dried cranberries to 40% from 15%. Mexico and Canada also added duties. As a negotiating strategy against Mr. Trump, this makes sense: The top cranberry-producing state is Wisconsin, which voted for Mr. Trump and elected Speaker Paul Ryan.
It's Thanksgiving. We are supposed to be grateful for the food on our plates and for the people who work so hard to grow it. Instead, we are watching them plow their year's harvest under. It's just crazy.