As soybean tariffs go into effect and trade war looms, farmers in Minnesota fear the worst

Minnesota's greatest potential casualties in the nascent U.S.-China trade war are the state's soybean farmers. They now face a 25 percent price hike on soybeans they sell in China. Whether they can find alternative markets to offset lost Chinese sales or less revenue from those sales is unclear. China is Minnesota's main export market for soybeans, and soybeans are the state's major agricultural export.

Blue Earth County soybean farmer Kevin Paap said Friday he has not yet heard of any canceled purchases. But Paap, president of the Minnesota Farm Bureau, feels like a bad dream has come true. The imposition of the U.S. tariffs on Chinese imports that began Friday will now trigger retaliatory tariffs on U.S. products sold in China.

"It means it's real," said Paap. "The worry has turned into reality. We're not just worried in the short term. We're concerned for the long term as suppliers."

Minnetonka-based Cargill said it has seen a "significant slowdown" in sales by farmers of soybeans, a reaction to the 18 percent decline in soybean prices since May. "The economic turmoil and uncertainties resulting from tariffs are harming U.S. farmers, and trade concerns have played a major role in this price drop," Devry Boughner Vorwerk, the company's head of corporate affairs, said in a statement Friday.

The Chinese tariff list also includes dozens of dairy, poultry and pork items, which could have an impact on Minnesota's livestock sector.

U.S.-made off-road vehicles appear on the list as well. Polaris Industries, a major manufacturer of such products could be affected if it ships vehicles to China. The company could not be reached for comment Friday. But it may be spared as its most recent annual report lists a "wholegoods manufacturing" operation in Shanghai.

Minnesota companies that purchase certain kinds of manufacturing machinery and some electrical components from China will also see their costs for those products increase 25 percent as a result of the Trump tariffs on $34 billion worth of Chinese imports.