DES MOINES, Iowa -- Carol Miller of Ankeny has lived through a farm crisis, and knows what it takes to survive.
"That's why you get a little concerned when you see something like this, because we`ve gone through this," said Miller. What Miller sees taking place right now between the U.S. and China gives her flashbacks. "When President Carter put an embargo on grain going to the Soviet Union, we lost markets and we`ve never regained all those markets back," said Miller. "Because the Soviet Union went to other sources."
Miller is worried that something similar could also happen this time around. "China can go to Argentina and Brazil," said Miller. "There's other sources for soybeans and other crops and livestock for them. And, over in Argentina and Brazil, they can double crop. For us here, we are limited to one crop."
The impact of China's proposed 25 percent tariff on U.S. soybean imports is already being felt. "30 percent of the entire U.S. soybean crop ends up in China," said Dr. Chad Hart, Associate Professor of Economics at Iowa State University. "And, that's why this was such a big deal to the soybean market today."
Dr. Hart says farmers have good reason to be worried.
"They saw an immediate impact on their prices," said Dr. Hart. "As soon as this was announced the soybean futures went down by over five percent this morning. Now, we saw some recovery throughout the rest of the day, but they`ve already felt an economic impact due to these announcements."
Dr. Hart sees the rapid escalation of trade tensions between the U.S. and China as a full-blown trade war.
"For the 53 billion dollars in products that the U.S. is putting a tariff on that come from China, that represents about ten percent of all the trade we do with China," said Dr. Hart. "When you look at the 53 billion dollars` worth of trade that China`s putting tariffs on, that represents almost 40 percent of what we ship to them. I think when you're talking about double-digit numbers there, yeah you`re in the realm of a trade war."