July 13, 2018
US raging trade wars: The impact on American agriculture
China has imposed tariffs on $34 billion worth of US products, with those measures aimed specifically at the latter's beef, seafood and dairy.
About 545 US products will be impacted by the Chinese government's latest move. The development comes as recent US tariffs sparked an exchange of counter tariffs, notably between the US and China.
Earlier, US President Donald Trump, whose policies and regulations are no stranger to controversy, confirmed 25% tariffs on $34 billion of China goods on July 6. The tariffs are expected to affect 818 Chinese products, including industrial machinery, thermostats and automobiles.
Weighed down by the likelihood of Trump imposing the tariffs on a further 282 Chinese goods, the total value can tally up to $50 billion.
In early June this year, days after Trump sounded out Canada for its high tariffs on US dairy products at the G-7 summit in Quebec City, the US was caught in another trade scuffle: this time, Mexico imposed a 10-15% tax on almost all of US cheese exports, in retaliation for the tariffs that Trump placed on Mexican steel and aluminium.
The tariffs would significantly affect cheese exports from the US to Mexico, which account for 28% of US cheese exports and 80% of Mexico cheese imports. Coupled with China's influence on the US dairy industry, a weakened US-Mexico cheese trade could pose a serious challenge to the entire US agriculture in the long run.
According to the US Chamber of Commerce, the continuous tariff clashes could harm consumers instead of helping them.
It will get increasingly difficult and expensive for those in the agriculture industry (for e.g. farmers, processors, etc.) to conduct business with significant trading partners such as China, Mexico and Canada.
This is especially so when they face stiffer competitions from other markets, which can lead to an eventual business decline.
The Chamber President Tom Donohue added, "The administration is threatening to undermine the economic progress it worked so hard to achieve."