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Agricultural Economists are Concerned over Tariffs on Commodities

04/26/2018

Ron Smith writing for Delta Farm Press reported on the opinions of leading agriculture economists on proposed tariffs to be imposed by China on U.S. commodities.  The overwhelming impression is that both nations will lose in a trade war but that farmers will be especially impacted. 

 

Dr. Mark Welch, Texas Agri-Life Extension economist at College Station noted that decreased exports will reduce commodity prices in the U.S.  Although this will benefit livestock producers, farmers will suffer and over the short term acreage planted to soybeans will be curtailed to restore equilibrium between supply and demand. 

 

This opinion is shared by Dr. Mary Marchant, professor of Agriculture and Applied Economics at Virginia Tech. who expressed the opinion that a trade war will be bad for the economies of both the U.S. and China.

 

Dr. Aaron Smith, Extension Agriculture Economist at the University of Tennessee predicts a $600 million decline in the value of soybean exports if China imposes a tariff on U.S. soybeans ranging from 10 to 35 percent.

 

China is now less dependent on the U.S. for imports and is in a position to retaliate against U.S. tariffs in specific sectors including soybeans.

 

The academic agricultural economists quoted hold that although tariffs may not have a significant effect on U.S. economy, the agriculture sector will be disproportionately affected.  Dr. Welch noted, “Farm profitability requires that we have access to the growing populations of the world with their rising incomes.”  He added, “U.S. farmers often bear the brunt of trade disputes or disruption for political purposes.”