Why this Wisconsin farmer says tariffs will impact you too

Wondering if Trump’s tariffs will impact your pocketbook? This Wisconsin farmer breaks down how the president-elect’s pledge to impose tariffs on imports will show up in the grocery aisle.

A car pulls into the driveway at Les Danielson’s farm in Cadott. Danielson’s dogs run to greet the driver, and Danielson walks over to see what the visitor needs. Listening to the visitor talk, Danielson nods and the two go into the farm’s steel shed, emerging moments later with a bag of feed the driver puts in the trunk of his car.

About a half an hour later, another visitor pulls up in his pick-up truck. There’s a similar greeting and friendly exchange.

These welcomed calls and business dealings are consistent occurrences throughout the rural community in northern Chippewa County, where friends and neighbors count on each other for advice and help. It’s notably true for the entire Danielson family, whose farm roots go back four generations.

“The first farm that was homesteaded was about 1880—we have deep roots here,” Danielson said.

And while his predecessors focused on dairy cattle—“I grew up milking a herd of around 100 cows with my family,” Danielson said—today, his nearby farm has branched out a bit. “I milk 25 cows—a small dairy still, but I also store and dry corn for area farmers, and I do about 600 acres of cash cropping—corn and soybeans—so I follow the grain market more than the dairy market.”

“We really hurt our farmers”

Following the grain market is a little disconcerting for Danielson these days. He and farmers like him are bracing for the potential impact of President-elect Donald Trump’s tariff pledge.

The incoming Trump administration has pledged to impose significant tariffs on US imports, to an extent not seen since the Great Depression. The president-elect has said that he will use emergency executive authority on his first day in office to impose 25% tariffs on Canada and Mexico, the United States’ closest trading partners, and a 10% tariff on Chinese goods. He also campaigned on an across-the-board tariff, which he first proposed as a 10% tariff on all imports and later suggested that could increase to 20%.

While these costs are attached to goods being imported into the country, they will almost certainly affect exports—including and especially exports from Wisconsin farms. We know from experience.

When Trump last levied tariffs, the European Union, Canada, China, and other trading partners imposed their own tariffs in retaliation. As a result, US exports suffered.

“When we got into a trade war with China, that really hurt the price of our corn and soybeans,” Danielson said. “They both were well below the cost of production.”

The US Department of Agriculture (USDA) said that trade war led to more than $27 billion in US agricultural losses. To prevent a wave of farmer backlash, Trump and Congress sent that much out to farmers in relief checks, which ultimately ended up worsening the budget deficit, creating an overall worse economy for Americans.

Now, Wisconsin farmers are worried about what will happen when Trump takes office for a second term—especially since this time, the 78-year-old politician who’s focused on revenge, won’t be thinking about getting reelected in four years.

“If we can’t get our soybeans into China, which is our largest buyer of soybeans—if China gets into a trade war with the US and China decides they want to buy soybeans from Brazil and not buy ours, it really hurts—it hurts on-the-farm prices,” Danielson said.

In a recent study, the National Corn Growers Association and the American Soybean Association said soybean exports could fall nearly 52% and corn exports about 84% if China responds similarly this time around.

“The trade war with China was supposed to reap benefits for our economy, and it did the opposite,” former acting US Trade Representative Miriam Sapiro said. “We lost hundreds of thousands of jobs.”

“We really hurt our farmers. Some of the bigger ones were able to get support, but smaller farmers had a really, really hard time in Wisconsin and across the country.”

“It’s going to be more expensive”

Sapiro also served on the National Security Council and has been directly involved in international economic policymaking.

She said while Trump claims tariffs will hurt foreign governments and companies, the reality is that Americans will be hit the hardest. US importers, which are businesses, typically pass increased costs on to US consumers.

“Those companies, if they’re importing anything from abroad to then make a product to export, it’s going to be more expensive,” Sapiro said. “So this is really, really going to hurt people—hurt the middle class.”

Danielson agreed. “So as a farmer, as I go to buy supplies for my farm, whether it’s something simple like pipes or things I need in the barn—lightbulbs, whatever—they become more expensive as they enter the country.”

Sapiro explained it’s a price paid by everybody—”whether they are rich or poor”—something called a regressive tax.

“It’s actually going to hurt lower and middle income people much more, because they can least afford this kind of tariff,” Sapiro said. “And those who have more resources may not notice as much, but it’s going to be really rough on our middle class.”

In fact, a typical family in the US could pay thousands more per year. The Center for American Progress Action Fund recently calculated tax increases on consumer goods for a middle-income family, and the predicted impact on everyday Americans’ bank accounts is significant.

“Studies have shown that this idea is going to cost families about $3,900 a year,” Sapiro said. “That would be nearly $16,000 over four years—because anything you buy that comes from another country is going to be more expensive.”

This includes a $200 tax increase on food, a $240 tax increase on oil and petroleum products, and a $210 tax increase on medicine.

“Reverberations are still felt in agriculture today”

Along with growing corn and soybeans, the Danielsons have grain storage at the farm. Photo by Salina Heller/UNN

The US-China trade war during the first Trump presidency caused deep damage to many farmers and their livelihoods. Farmers and the folks who advise them don’t want it played out a second time.

“The reverberations are still felt in agriculture today,” said Mike Stranz, vice president of advocacy for the National Farmers Union. “I think that gives us a clear sign of the sort of tumultuous approach we would likely see (again).”

“That’s why we’re highlighting the need for taking a more measured approach to have a plan, so that we don’t end up in the situation we had in 2018 and 2019 for farmers in particular.”

Government payments to farmers shot up to historic levels beginning in mid-2018, when the USDA started writing checks to farmers and ranchers to pay for the damage from Trump’s trade war.

Danielson said it was “pretty unfortunate” that at the same time farmers were losing trading partners, they were also being hurt domestically by corn not being used in ethanol.

He said Trump tried to make up for it with large government payments. “Payments spiked tremendously under the Trump administration because our farm prices were so low.”

“I think that’s one reason a lot of farmers really like Trump—because they received all of these ‘Trump payments,’ as they’re referred to,” Danielson said. “But you know, the man who destroys our market really shouldn’t be rewarded for using government money, all of which is borrowed, to backfill the farmers’ income.”

Danielson hopes export markets remain open for business and free from red tape, and that the president-elect somehow won’t carry-through with massive hikes on tariffs that will send prices soaring.

“Free trade has been beneficial—it’s been beneficial to farmers and I think it’s been very beneficial to consumers as well, and I think if we back away from that, I think we’ll find more inflation,” Danielson said. “I think that’s what drives inflation—tariffs on goods coming into the country.”