WYATT, Ind. (AP) — Larry Enders estimates that he's already lost about $23,000 on the value of last year's harvest since the tariff battle between the United States and several of its trading partners got underway several months ago.

And Enders operates a relatively modest 700-acre farm just south of Wyatt in southeastern St. Joseph County.

"There's no way to make it back up," said the 74-year-old farmer. "You just have to wait until next year."

Despite the possible loss on the crops, Enders says he and many of his friends in the area are more fortunate than others because they're not carrying any debt.

"Everything is paid for," he said of the farm his family has been operating since 1845.

The toll could be much worse on larger farms.

Chris Hurt, an agricultural economist at Purdue University, said that $15.5 billion of the $34 billion in retaliatory tariffs imposed by China are aimed at farm products — specifically corn, soybeans, wheat, pork, beef and poultry.

Since Indiana produces about 5 percent of the nation's soybeans, the 25 percent tariff on that commodity alone could end up costing Hoosier farmers roughly $150 million, he explained.

"The American farmer and the Chinese consumer will be hurt," said Hurt. "The only benefit will go to Brazil and other countries that produce soybeans."

The drop in corn and soybean prices since June 1 has been caused by the tariffs as well as by the plentiful harvest that is currently being predicted, said Hurt.

Because the net effect will be a super-abundance of both commodities in the United States, there will be downward price pressure, he explained.

"This is hitting prices significantly and it should be alarming to crop farmers," Hurt said.

Based on the drop in prices since June 1, a farmer with 1,000 acres of corn and the same amount of soybean, for example, has gone from an expected return of about $42,000 to a loss of $134,000, he explained.

And it's coming at a time when farm income already is down about 45 percent compared to what it was from 2010 to 2013, said Hurt, adding that overall income actually could drop to what it was from 2000 to 2005.

"You try living on what you were making 10 to 15 years ago," said Hurt, adding that many farmers will have to borrow to get through.

Beyond farmers, however, Ball State economist Michael Hicks believes the tariff war that pits the United States against China as well as a host of neighboring and European countries that are typically friendlies could significantly hurt Indiana's economy, especially steel, aluminum, soybean and corn.

In a recent study, Hicks estimated that Indiana could lose roughly 6,000 jobs by the end of 2018, rising to 14,000 in 2019 and that tariffs could reduce the state's GDP by $668 million next year.

And what has Hicks and other economists especially concerned is that the tariffs could lead to an all-out trade war in which each side continues trading ever-escalating trade sanctions.

"We're in the second-longest recovery in U.S. history," Hicks said. "But this is the very type of thing that brings that to an end."

The Recreation Vehicle Industry Association and numerous other groups have expressed concerns about the possibility of a trade war. District 2 U.S. Rep. Jackie Walorski, a Republican from Jimtown, arranged a meeting in June so that business representatives could express their concerns to Commerce Secretary Wilbur Ross.

Steel Warehouse and other area companies are closely monitoring the situation and hoping that the battle doesn't turn into an all-out trade war.

If there are any prolonged price increases, for example, some businesses might start looking for lower-cost alternatives to the products offered by Steel Warehouse, said Mike Lerman, president of the company.

"Is this really going to happen?" Lerman asked, still hoping that the trade issues get worked out. "You prepare for the worst, but you hope for the best."

Hicks said trade sanctions are typically directed in a more targeted fashion in order to get a country such as Iran to abandon its nuclear development or sponsorship of terrorism.

Trade sanctions aimed at China, which has disregarded intellectual property rights for decades, are understandable and perhaps necessary, said Hicks.

But it's hard to understand picking battles with Europe and other usual allies at the same time.

"Using tariffs as a scalpel is one thing," Hicks said. "This is taking a baseball bat into a china shop."

President Donald Trump's administration is acting in a more nationalistic way than previous administrations going back decades, said Hurt, the Purdue agricultural economist.

A lot of work has been done over the past 40 years to reduce trade barriers, and disputes are generally taken to the World Trade Organization for dispute resolution, he said.

"This is a style we haven't seen for some time," said Hurt, adding the president believes the country should be in control of its trade policies rather than abdicate any authority to a neutral organization.

For his part, Enders understands the president's decision to go toe to toe with the Chinese over unfair trade practices.

"We've been getting the short end of the trade stick for a long, long time," he said. "Where did all of our manufacturing go?"

And though it seems that farmers are often the group that faces the consequences in trade battles, Enders believe it's important to finally address the issue.

"I don't like losing money," he said, "but I guess we're going to have to accept what we get."


Source: the South Bend Tribune, https://bit.ly/2ujm9zq


Information from: South Bend Tribune, http://www.southbendtribune.com