Until the 1980s, the geopolitical relationship that dominated dinnertime conversation was Russia. The Middle East was featured in the 1990s, and now it’s China, with a dash of Russia thrown in for good measure.
However, does China have a significant influence on the daily lives of ordinary Americans?
Dairy producers in the United States will tell you that they do.
“I can’t tell you how many dairies have gone out of business in the state of Utah in the last four months,” said Ron Gibson, President of the Utah Farm Bureau and an Ogden dairy farmer.
“I mean, we’re almost at 100 dairies in the state now.”
“Just 30 years ago, we had 500.”
China’s demand is increasing.
China’s population is estimated to be 1.44 billion people. Naturally, they do not have enough dairy cows to feed the whole nation. As a result, they, like the rest of the world, import what they need.
Historically, the nation has imported powdered milk from countries such as New Zealand, sections of Europe, and, of course, the United States.
According to Ron, they have just begun to minimise their reliance on American milk products.
“The barges are coming from China to America with steel and they’re going home empty because we’re not sending anything back, and that’s a big kick in the gut to agriculture,” he added.
“When those barges return empty, it’s a lost opportunity for a farmer or rancher in the United States of America.”
“We’ve become the last person on the planet they want to buy their products from, and they are not happy with us.”
China’s declining trust in the U.S.
It’s easy to understand how Ron arrived to this conclusion.
China, for example, is helping Russia’s conflict in Ukraine, and they were suspected of flying a spy balloon over the United States until it was shot down in Montana this year.
Tensions between the United States and China are high, and the figures reflect Ron’s fears.
According to the World Trade Centre Utah, the Beehive state sold $2,401,582 in powdered milk to China in 2021. Last year, they only sold $601,659, a 25% decrease from the prior year.
Farmers such as Ron are seeing it personally.
“Last year, we were getting somewhere between $24 and $25 for 100 pounds of milk,” he said.
“It appears that we will receive between $15 and $17 this year.”
“That’s a 40% decrease in income for us, and our costs haven’t dropped one bit.”
However, not all US-China connections are deteriorating.
The World Trade Centre Utah’s Chief of Staff is Stephen LeFevre.
“Overall, the trade relationship has been declining in some ways while remaining constant in others, because our economies are so intertwined,” he stated.
“When I look at agriculture as a whole, it’s fairly stable, but when broken down, livestock and dairy have declined.”
“Specifically, this year and the previous year have been quite low in comparison to previous years.”
The commercial relationship between China and the United States is deep and intricate – both nations depend on each other.
Despite this, ‘economic warfare’ may be conducted, especially between nations that have signed free trade agreements.
“It’s essentially [economic warfare].” “Using economic pressure to persuade a trading partner to change their political or other behaviour,” Stephen stated.
It’s not uncommon; we’ve done it to our partners and they’ve done it to us.
When it comes to the dairy business, Stephen believes it’s unclear if economic warfare is to blame.
“Well, we’ve seen it before… “We’ve seen [trade changes] with other countries just generally as the geopolitical landscape has changed,” he stated.
I believe both the United States and China are beginning to consider the long term. As a result, decreasing dairy trade may be strategic.
“However, they may be diversifying, and it may be easier to get it from a neighbouring country.”
Whether strategic or not, tensions between the United States and China cannot be ignored.
According to Stephen, the tensions between the two nations are difficult to overlook.
“It’s possible that China is beginning to view the United States as an untrustworthy trading partner, and at any moment, they could lose supply of critical or important things,” he added.
As a result, the drop in trade may be a purposeful, strategic pressure from China as a result of tight ties at the highest levels of governance, or they may just be diversifying their supply chains by purchasing from nearby nations such as New Zealand or Australia.
Regardless, the tension is being felt at kitchen tables far from diplomatic chambers, and the consequences are very real for farmers like Ron Gibson.
“I deal with it every night; I was up until two a.m. last night, trying to figure out what we’re going to do… Farmers and ranchers are not doing well; they are genuinely hurting, and our sector as a whole is really in a bad place.”
