Economic Study Quantifies the Cost of the Trade War on U.S. Agriculture
AAEA members release new research in AEPP
Retaliation led to significant U.S. agricultural export loses that estimated at $13.5 to $18.7 billion dollars on an annualized basis. U.S. trade losses were particularly pronounced on homogeneous bulk commodities, whereas differentiated consumer-based products dampened the impact of realiation.
In the new article “Agricultural Exports and Retaliatory Trade Actions: An Empirical Assessment of the 2018/19 Trade Conflict,”Jason Grant and Charlotte Emlinger from Virginia Tech, as well as Shawn Arita and Robert Johansson from the USDA, and Chaoping Xie from Nanjing Agricultural University find out to what extent did the 2018/19 trade war impact U.S. product-line agricultural exports and compared these trade effects to the USDA’s trade aid delivered to farmers.
Grant says, “Global trade disruptions such as the 2018/19 trade war caused significant losses for the agricultural industry. Prices fell as exports were temporarily shut out of foreign markets, and, to the extent that commodities can be stored, stocks accumulated which affects product quality and the stream of farm income. Exacerbating these problems, we find very little evidence that U.S. exports were able to be reoriented to alternative, non-retaliating markets—an indication of high bilateral trade frictions and the destructive consequences of retaliatory trade actions.”
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ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices and the online open access publication series Applied Economics Teaching Resources. To learn more, visit www.aaea.org.
Contact: Allison Ware
Senior Communications Manager