Trump’s trade war with China is stoking the Amazon fires

What possible connection could the fires in the Amazon rainforest have with Trump’s trade war against China? Well, Brazilian farmers and ranchers are lusting to replace U.S. farmers as China’s go-to supplier of agricultural products. They need additional ground to grow soybeans and other crops to export to China, while China needs a new source of foodstuffs to make up for the curtailment of American-grown imports. So, burn baby, burn.

U.S. farm exports have been a bright spot in America’s foreign trade picture for years, due to the productivity of American farmers. Until recently, China has been a growing market for our agricultural products, increasing by 700% from 2000 to 2017. China bought $19.1 billion worth of U.S. farm exports in 2017, according to the American Farm Bureau.

These sales to China did not come easy. U.S. farmers worked hard to build up relationships with Chinese buyers and reasonably expected increasing sales into the future. Then came the Trump trade wars. Farm exports plummeted to $9.1 billion in 2018 and will continue dropping.

Trump started the trade war to punish the Chinese for stealing American technology. Why not instead work with our allies to collectively target the theft itself, like prohibiting the importation of goods containing stolen technology? It was entirely predictable that China would retaliate against our agricultural sector. American farmers are paying the price for a misbegotten trade fight and that price is steadily increasing.

While U.S. farmers have suffered, Brazilian farmers have greatly increased their China trade. The South China Morning Post reported in May that Brazil’s soybean farmers “have triumphed spectacularly in the US-China trade war.” Their exports to China increased by 30% last year, while U.S. sales dropped by half.

The Brazilians struggled to meet the China demand last year and need to put additional land into production to serve the growing market in China, both for crops and meat products. Most of the Amazon fires have reportedly been started or cheered on by agricultural interests to get more farmable land. Brazil’s president, Jair Bolsonaro, has encouraged the deforestation. Our President tweeted that Bolsonaro has “the full and complete support of the USA.”

Farm equipment companies are also suffering from Trump’s trade war because U.S. farm income has fallen along with the loss of the Chinese export market. While our farmers are buying less machinery, the equipment manufacturers have found markets elsewhere, particularly in Brazil where there is an increasing demand.

It is quite likely that American farmers will be unable to win back the Chinese markets they worked so hard to establish over the last couple of decades. Now that the trade relationship with the U.S. has been broken, China may come to regard Brazil as a more strategic and reliable government to trade with. Brazil has the advantage of not being a political adversary of China. And Brazil gives China a new partner in the United States’ traditional sphere of influence in South America.

The Amazon fires are also a global warming threat since the Amazon rainforest has traditionally absorbed about 5% of global carbon dioxide emissions. The burning rainforest releases carbon dioxide while reducing Earth’s capacity to capture future CO2 emissions.

In sum, the Trump trade war with China is an all-around loser for the United States. The U.S. farm economy suffers, while Brazilian farmers and ranchers take over our markets in China. They expand those export markets by deforesting the Amazon rainforest. That, in turn, contributes to global warming, which will make it harder for our farmers to grow foodstuffs for the world. Who expected a fancy pants New York real estate developer to know how to protect America’s farm economy?

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4 thoughts on “Trump’s trade war with China is stoking the Amazon fires”

    1. I think Trump’s farm support is weakening. The farm community is starting to realize that Trump knows little and cares little about the average farmer.

  1. Thank you Mr. Jones for your continued research in to what is behind the headlines. I doubt most of us were aware of Mr. Trump’s agreement with Brazil’s President on the deforesting of the Amazon. We are becoming the Ugly Americans as written in the 1958 political novel by Eugene Burdick and William Lederer. How sad and how scary!!

    1. Thanks for your comment, M. Langton. Reuters just published a report that Argentina has made an agreement with China to supply soybean meal. By going after China with a meataxe approach, instead of targeting its tech sector to solve a tech problem, Trump has caused our farmers to needlessly suffer. One commentator predicts that China will seek to make more of its own tech components or buy them from countries other than the U.S. so that it can reduce its reliance on our tech companies. The U.S may end up selling very little to China in a few years because of the self-defeating tariff war that Trump initiated.

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