Trade wars hit farmers hard, but Biden’s attack on Trump oversimplifies

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In recent high-profile comments criticizing President Donald Trump, Democratic presidential candidate Joe Biden addressed a topic that touches home in Wisconsin — struggling farms.

Speaking at Manitowoc on September 21, 2020, Biden said Trump unleashed a trade war that “led to an increase in farm bankruptcies.”

Admittedly, times are tough for Wisconsin farmers, especially in the dairy sector.

In 2019 alone, Wisconsin lost 818 dairy farmspart of an accelerating decline in which about a quarter of the state’s dairy farms have gone out of business since 2014.

But amid such a long trend, is it fair to blame a “push” on Trump’s trade wars?

Let’s dig.

Trade wars have taken their toll

Campaigning as a negotiator in 2016, Trump promised to renegotiate US trade deals in America’s favor, and once in office he imposed tariffs aimed at achieving that goal.

Many countries – including China, Canada, Mexico – as well as the European Union have retaliated with their own tariffs that hit US farm products.

Between July 2018 and August 2019, for example, the Brookings Institution reported the United States announced tariffs on more than $550 billion of Chinese goods, and China retaliated with tariffs on more than $185 billion of American goods. American producers have been hit twice since many studies showed that US companies paid primarily for US tariffs.

The toll imposed on farmers was heavy enough for the federal government to create the Market Facilitation Programwhich paid more than $14 billion to farmers in 2018 and 2019 to mitigate the impact of trade wars.

Farm bankruptcies have increased

In this environment, farm bankruptcies increased in 2019 – the point where you would expect to see a spike given the trade battles that were unfolding at the time.

That year, 595 family farmers filed for Chapter 12 bankruptcies nationwide, up from 498 filings a year earlier. Reuters and others reported. Chapter 12 is a bankruptcy code created during the farm crisis of the 1980s to allow family farmers and small fishing operations to continue operating while they develop plans to repay lenders.

Wisconsin leads the nation with 57 filings for bankruptcy, 16 more than any other state.

But experts say it’s impossible to draw a black line between trade wars and rising bankruptcies.

Although the jump from 2018 to 2019 was the largest in recent years, bankruptcies have been increasing for some time.

After Chapter 12 bankruptcies fell from 723 in 2010 to 361 in 2014, their numbers have been rising steadily ever since.

Farm bankruptcies have drop slightly in the first half of 2020 – the total of 284 was down 10 from the same period in 2019 – but this was “largely” due to government payments to farmers under the Coronavirus food aid programaccording to the American Farm Bureau Federation.

RELATED: Democrats exaggerate by slamming Trump’s farm bailouts as ‘a gift to big business agriculture’

Additionally, trade wars are far from the only factor at play for farmers in Wisconsin and across the country.

Reuters described it thus:

The rise in (2019 bankruptcies) was somewhat expected, bankruptcy experts and agricultural economists said, as farmers face trade battles, ever-growing farm debt, prolonged low crop prices raw materials, unstable weather conditions and a deadly pig disease that decimated the Chinese livestock.

John Newton, chief economist at the Farm Bureau, cited many of the same factors in an interview with PolitiFact Wisconsin.

“Farm bankruptcies are a function not only of retaliatory tariffs on U.S. agriculture by China, but also of years of low commodity prices created by a global economic downturn and large supplies of grains, oilseeds and livestock internationally and recent natural disasters,” Newton said. in an email. “I don’t think the rise in farm bankruptcies can be blamed on retaliatory tariffs alone.”

Our decision

Speaking at Manitowoc, Biden said Trump sparked a trade war that “led to an increase in farm bankruptcies.”

Trade wars have indeed hit farmers hard. And bankruptcies rose at the height of the trade wars, rising more than they had in the previous four years.

But this claim oversimplifies by listing trade wars alone as being responsible for this increase.

We define Half True as a statement that is partially accurate but omits important details or takes things out of context. It fits here.

This fact check is available on IFCN 2020 US Elections FactChat #Chatbot on WhatsApp. Click on herefor more.

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