President Donald Trump’s trade war with China threatens profits for Virginia’s soybean farmers, a group that includes Gov. Ralph Northam, he said during a financial update to lawmakers.
Northam, speaking at a presentation to the Joint Money Committee, owns and leases about 50 acres of farm land on the Eastern Shore.
“I’m a farmer,” said Northam, who is generally better known as a pediatric neurologist. This year, he said, his leases farm land is full of soybeans, but he and other growers in the state may not be willing to harvest crops if they won’t be able to sell them.
“They may very well stay in the fields if they can’t sell,” Northam told the Joint Money Committee. “The farmers would much rather sell at a profit than rely on federal subsidies.”
Soybeans are usually Virginia’s top export to China. The country bought $700 million worth of agricultural exports from Virginia in 2016.
That’s fallen to $235 million because of Trump’s trade war with the country, Northam said. In 2018, Virginia exported more than $58 million soybean products to China – an 83 percent decrease from 2017, U.S. Sens. Tim Kaine and Mark Warner said in a statement criticizing the president’s “haphazard, ill-planned trade war with China that raised taxes on a number of Virginia commodities.”
Trump has floated the potential of imposing additional tariffs on Chinese products on top of others he rolled out last summer. That round of tariffs came with a federal farm bailout was intended to soften the blow of the retaliatory tariffs.
Trump’s potential tariffs against China and retaliatory tariffs imposed in response could cost the United States billions of dollars in production and lost jobs, the independent nonprofit Tax Foundation estimated. In the last few days, Trump has appeared to back away from some of the tariffs.
The tariff concerns are especially acute right now because of an expected national economic downturn that would impact Virginia, Northam said.
Layne said it seems there could be an economic downturn on the horizon, but it will pale in comparison to 2008’s Great Recession. Trump has discussed policy changes that suggest it’s coming, he said, citing the president’s potential proposal to implement a payroll tax cut.
“You don’t do that unless there’s something wrong,” he said.
Del. Chris Jones, the Republican chair of the House Appropriations committee, said if there is a recession, the state is prepared to weather it with about $1 billion in the reserves.
“We feel comfortable that we’re in a good spot, the best we’ve probably been in to deal with a recession but we don’t have any new money, really, to spend,” Jones said. “It’s business as usual, we’re not getting too excited.”