China accounted for 95% of the $27 billion in U.S. farm export sales that were lost in 2018 and 2019 as a result of the trade war begun by President Trump, said a USDA report. Sales to China rebounded after the “phase one” trade agreement, but U.S. market share has remained lower than before the tit-for-tat tariffs.
Six U.S. trade partners — Canada, China, the EU, India, Mexico, and Turkey — responded with retaliatory tariffs after the United States imposed duties on imported steel and aluminum and on China for its policies on intellectual property and technology transfer. The USDA’s Economic Research Service estimated total losses of farm exports at $27 billion over two years, or $13.2 billion a year.
“Across retaliatory partners, China accounted for approximately 95% of the losses — $25.7 billion,” said the ERS. Sales to the EU fell by $600 million and to Mexico by $500 million. Among commodities, soybeans saw 71% of the reductions, followed by sorghum at 6% and pork at 5%.
“At the state level, estimated losses were largely concentrated in the Midwest region,” said the report. Iowa lost $1.46 billion a year, Illinois lost $1.41 billion, and Kansas lost $955 million.
U.S. farm exports accounted for 20% of China’s agricultural imports in 2017, the last year before the trade war. The phase one agreement, signed in early 2020, called on China to vastly increase its purchases of U.S. food and farm products. Sales were a record $33.4 billion in fiscal 2021. “However, U.S. market share has not fully recovered to pre-retaliatory levels one year out from the phase one agreement signing,” said the ERS.
The report, “The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture,” is available here.
Credit: www.agriculture.com – Source link