China agrees to 3-month freeze of additional 25 percent tariff on US-made autos: report
US farmers letting crops rot as storage costs rise due to China trade war
Some U.S. farmers are reportedly letting their crops rot as storage costs rise amid the escalating trade war with China, according to Reuters.
The farmers say they are unable to sell their grain to China due to Beijing's 25 percent tariff on U.S. soybeans. That punitive measure came in retaliation for duties imposed by Washington. It is now too costly to store the grain in elevators, or silos that store grain, Reuters reported.
The cost of storing grain in elevators is reportedly two to three times more than it cost at this time last year.
"I've never seen things this bad," soybean farmer Russell Altom, who is senior vice president of agricultural lending at an Arkansas bank, told Reuters. "I know several farmers who hired lawyers, to see if they can sue over the pricing and fees issues."
Grain farmers have begun plowing under crops or leaving them to rot, hoping that prices will decrease soon, Reuters reported, citing interviews with more than 20 farmers, academic researchers and farm lenders.
Farmer Richard Fontenot said "no one wants" the grains.
"I don't know what else to do," he said.
U.S. farmers planted 89.1 million acres of soybeans this year before China, one of the country's top soybean consumers, imposed the steep tariff, according to Reuters.
There was already an oversupply of grains in the U.S., and the trade war with China has exacerbated the problem.
Top White House economic adviser Larry Kudlow said Tuesday he expects the trade dispute between the U.S. and China to come to a head at the Group of 20 summit in Argentina later this month. The two countries are in a tense trade war marked by escalating tariffs on each other's goods.
Washington has already imposed tariffs on $250 billion worth of Chinese goods and Beijing has responded with $110 billion in retaliatory tariffs.
Of those tariffs, $200 billion of goods are set to increase from 10 percent to 25 percent on Jan. 1. President Trump could choose to halt that increase.