EVANSVILLE, Ind. (WFIE) - It is an international trade war with Hoosiers caught in the middle.
“We are not that excited about losing the world’s largest market for soybeans,” says farmer Joe Steinkamp.
The U.S. wants to raise tariffs on billions of dollars worth of Chinese goods, and China is firing right back. The back-and-forth over tariffs is already causing some trouble for local farmers and businesses, and it could start to cost you.
These new China tariffs affect about 5,000 products like beef, fruit, vegetables, and more. The National Retail Federation says the average household would spend an additional $2,300 each year if these tariffs happen.
“Whether you’re buying a new appliance for your house or new clothes for the kids, you’re going to see an impact,” says Southwest Indiana Chamber President & CEO Tara Barney.
Nearly everyone, everywhere will be digging deeper into their wallets, but for farmers, these tariffs are especially detrimental. Steinkamp says it is a big deal for local farmers, as one-third of all of their soybeans go to China.
“We want to put the seed in the ground and grow the crops to feed not only the people in the United States but around the world, and if we can’t export it to feed those people, where are they going to get all their food?” says Steinkamp.
Increasing taxes from 10% to 25% is sure to be significant for Hoosiers. Every year, Indiana exports more than a billion dollars of goods to China.
Barney tells us it is causing uncertainty.
“Uncertainty is a big, big deal because that’s how Wall Street manages itself is with certainty. And when our local businesses and our bigger businesses that are based here don’t have a certain future, they will sit on capital. They will not engage robustly in the world economy,” says Barney.
On Monday, following China’s announced retaliation, the Dow Jones industrial average tumbled more than 600 points.
“Lower prices mean less income. Less income means less things that we can spend money on that we want to, and any time you don’t get to spend money the way you want it’s always a disadvantage. We’d like to update some equipment, but we’re sure not going to do it in this situation,” says Steinkamp.
Steinkamp is like many who are holding off on investing in an unknown future.
“The biggest concern for farmers today is knocking out the next generation,” says Steinkamp.
President Trump did say the government will provide support for impacted farmers. Steinkamp tells us he hopes the tariff situation gets fixed so farmers can regain the soybean markets in China that they have spent the last 40 years building.
As it stands now, these higher duties take effect June first. So what should you do?
A financial adviser recommends price checking on everyday items. If you are planning any big purchases, like a TV or laptop, you may want to do it now as prices appear to only be going up.