By Nathan Reineck/Broadcast version by Mary Schuermann Kuhlman
Reporting for the Kent State-Ohio News Connection Collaboration

Nearly a year after the start of a dramatic trade war between the U.S. and China, high tariffs are preventing Ohio farmers from selling many of their soybean crops, costing farmers their largest export to China.

“Just in our industry, that one commodity has cost farmers millions of dollars on lost income and revenue,” says Jack Irvin, a federal lobbyist with the Ohio Farm Bureau Federation.

The trade war started last March with President Donald Trump’s introduction of steel tariffs, which he enacted with the intent of boosting the U.S. steel industry.

Chinese trade officials responded with a 25 percent tariff of their own on U.S. soybeans.

The tariff came as a shock to many farmers across the nation after 25 years of China’s increased purchasing of soybeans. Every third row of soybeans was going there, says Ben Klick, an Ohio farmer and member of the Ohio Corn and Wheat Growers Association.

China has consistently relied on large amounts of U.S. soybeans to supply its pork economy. Soybeans are commonly used in feed for pigs throughout the country.

Klick says he was lucky to get his soybeans to market before the tariffs were enacted. He says he still has other products he can sell, but unfortunately, some other farmers didn’t share in his luck.

Those who didn’t get their yields out in time have kept most of their soybeans in storage, waiting for the tariffs to be dropped.

Now, China has moved to buying soybeans from Argentina and Brazil, countries with growing agricultural sectors. Klick says the vast amount of soybeans imported to China from these two countries could boost them into top spots.

Klick adds he is worried because Argentina and Brazil can already plant crops more often than the U.S. and, with a few infrastructural improvements, they could take most of the market share.

“I know this trade war will end eventually, but, when it does, the issue that I see is will we, as farmers, be able to regain our access to China’s soybean import market,” Klick says.

This would prove a drastic setback, as Ohio farmers would lose a third of their buyers if they can’t win Chinese buyers back.

As farmers are getting ready to plant the next crop of soybeans, they don’t know if they can expect any trade with China, since the two countries have reached no trade deal.

Data from the U.S. Department of Agriculture show soybean exports are down more than 90 percent under the trade dispute and U.S. farmers lost nearly $8 billion in the past year.

Steel production in the U.S. rose about 5 percent last year after tariffs on foreign steel were increased 25 percent.

While the tariffs have helped the U.S. steel industry grow, their impact reaches beyond just farmers. Irvin points out agriculture creates $120 billion in economic activity and 12 percent of jobs are related to the industry.

The average U.S. citizen will see price increases on all kinds of products until a deal is reached.

“Some people can come out ahead if you’re protected, but it spills over in lots of other ways to lots of other firms and lots of other people,” says C. Lockwood Reynolds, an economics professor at Kent State.

If a trade deal isn’t resolved between leaders by early March, farmers will likely see even higher tariffs introduced.

“They both [U.S. and China] want what they want, and they look out for their people and they’re not going to give to each other,” Klick says.

Chinese buyers want U.S. soybeans, Klick notes, but won’t buy them until the tariffs are removed. Klick says he believes in the president and that’s why he voted for him, but says it’s unfortunate to be on the losing end of the deal.

And Klick notes there is only a matter of time before the president shifts his focus back to re-election in 2020 and trade is not at the top of his priorities anymore.

“I know there’s a greater good behind what we call this ‘market strategy’ but if I had to sit down with some Chinese grain buyers right now, I would ensure that if things get back to what I would consider normal that we would be ready with open arms to work side by side with them and get some great quality soybeans back into their country,” he says. “A very wise man once told my grandfather one time ‘You don’t fight with another country over food, they don’t forget stuff like that.’”

The Agriculture Department approved about $12 billion to assist farmers impacted by tariffs.

This collaboration is produced in association with Media in the Public Interest and funded in part by The George Gund Foundation.



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A new report found Connecticut's fiscal controls on the state budget restrict long-term growth.

The controls were introduced during the 2018 budget year to stabilize the budget and long-term controls but since their implementation, the budget surplus total grew to more than $12 billion, which observers said means they are twice as restrictive as they are supposed to be.

Patrick O'Brien, research and policy director at Connecticut Voices for Children, said there is a better way for the budget controls to work.

"We make the case for a more balanced approach," O'Brien explained. "One that maintains fiscal discipline while introducing the flexibility necessary to fund current needs and make public investments essential to supporting families and children, and growing the state's economy."

Reforming the fiscal controls involves changing the state's revenue and spending caps. In practice, the state needs a well-designed volatility cap since personal income and entity taxes are highly volatile. But the current cap's threshold was set too low and is indexed to a variable with no meaningful connection to the taxes, which created up to $755 million per year in restricted revenue, or more than $5 billion between 2018 and 2024.

Making changes to the caps would result in more reasonable restrictions on the collected funds. The report noted Connecticut's spending controls are beneficial. But because personal income growth is slower than the nation, it is limited economic growth.

O'Brien argued the spending cap could have created more revenue.

"If the state's spending cap had continued adjusting since fiscal year 2018 based on the original inflation index rather than a narrower index but excludes food and energy," O'Brien emphasized. "Which has made the spending cap excessively restrictive."

The report also found adjusting the budget reserve fund allows the funds to be used for services beyond debt reduction, like programs to help the state's children and families.

The Internal Revenue Service will be in the crosshairs in the second Trump administration, as the president-elect's recently announced choice to run the agency has called for it to be abolished.

Former Missouri Congressman Billy Long, Trump's choice for IRS Commissioner, cosponsored a bill to get rid of the IRS and implement a national sales tax in its place.

Ryan Polk, assistant professor of accountancy at Clemson University, said if the new administration starts laying off IRS workers, taxpayers and businesses in California and across the U.S. would see big delays.

"When you defund or reduce the funding at the IRS, you run the risk of a less helpful IRS," Polk contended. "The average, everyday taxpayer might be worse off when they have a question."

During the Biden administration, the IRS got an $80 billion boost in funding from the Inflation Reduction Act and used it to overhaul old computer systems and add agents, raising its phone call response rate from an abysmal 15% to over 80%. And the agency added a portal allowing people to upload documents instead of mailing them.

The IRS also debuted Direct File, a system allowing people to file their federal income taxes without paying a tax preparer, available in California and 22 other states. Polk argued the new Congress should understand cutting the IRS budget will limit its ability to pay for the administration's priorities.

"Just last year, they audited taxpayers and collected 100 additional billion dollars that wouldn't otherwise have been collected," Polk pointed out. "That's a pretty significant amount of money. It can go a long way, depending on regardless of the government program or tax cut you're trying to get through."

The IRS said it collects $100 in revenue for every 34 cents it spends on enforcement. Conservative critics of the agency alleged it has been weaponized, with some audits being targeted for political reasons.


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The word "fraud" is likely to circulate in the upcoming Minnesota legislative session. One political expert said state agencies are being targeted but the response requires careful thought.

The recent Feeding our Future scandal has spurred demand for more oversight of government spending in Minnesota. There are renewed concerns about organizations claiming to provide various medical services but engage in phony Medicaid billing.

Tim Lindberg, associate professor of political science at the University of Minnesota-Morris, said larger entities are making a more coordinated effort to defraud key agencies. He pointed out it mirrors global crime rings preying on consumers.

"There is some legitimate concern out there but it is also a global phenomenon that is increasing in size and importance," Lindberg observed. "I think government from the top down needs to sort of figure out a new way to deal with this."

Lindberg pointed out the state has investigative resources and internal controls but he thinks the public sector at large likely has some outdated monitoring approaches, especially as technology evolves. He argued it is important to remember agencies in the spotlight are helping people in need who are not part of these scams, and even with the best controls, completely eliminating fraud is impossible.

The cases have garnered headlines and since Democrats have the upper hand in controlling Minnesota government, Lindberg predicted Republicans will use the trend as part of their push for restrictions or cutbacks. He believes Democrats might agree to certain moves to win back public trust but stressed fraud against government is not a partisan issue.

"People doing these frauds, they don't care who's in office," Lindberg asserted. "They don't care who's in power. And Republicans and Democrats themselves have been in various levels, in various states, overseeing governments where this happens."

Taxpayer dollars are at the center of what's happening. Lindberg added the private sector must also mitigate fraud with steps like major retailers locking up essential items in cases. He suggested lawmakers have to avoid veering off-path.

"What are these ways in which government can work better, more efficiently, but also not eliminate the benefits that these programs are designed to do?" Lindberg asked.


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