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NDSU study: U.S. ag exports hit hard – China tariffs drive $15 billion in annual losses

A new study from North Dakota State University says China’s retaliatory tariffs are causing greater losses for U.S. agricultural exports than the previous trade war.

“Almost $15 billion in annualized losses,” says Shawn Arita, the associate director of the Ag Risk Policy Center at NDSU.

That compares to more than $10 billion in the 2018-19 trade war.

Arita tells Brownfield China’s embargo of U.S. soybeans was damaging, making up nearly half of the losses, about $6.8 billion. “It was very damaging.”

He says U.S. beef exports played a role.

“Back in 2018 and 2019, we didn’t export much beef or poultry to China at that point.”

Cotton also contributed.

The study says U.S. ag exports to other countries increased during the March to February timeframe, which suggests some of the lost business was re-directed, but the gains only partially offset the losses.

Arita says China’s tariffs on U.S. ag products, which include a baseline tariff of about 10 percent on most U.S. ag products, with a 13 percent tariff on U.S. soybeans, are still in effect.

“Straight up, it makes us on our soybean side, not competitive with Brazil. They’ve been quiet, in terms of export sales of soybeans to China. We haven’t seen much purchases since January when China met the 12 million metric ton commitment. Back then, China was actually paying a premium for our soybeans over Brazil.”

However, removing the tariffs are part of the ongoing discussions between the U.S. and China.

Arita says China must remove the tariffs to level the playing field for the United States, and ensure the U.S. benefits from recent purchase commitments. He says it’s unclear if the United States will be able to recover.

“We also have to think through, in terms of the overall market conditions. Their own levels of demand and supply of commodities.”

The U.S. and China are expected to continue trade talks, with U.S. President Donald Trump inviting China’s President Xi Jinping for a White House visit in September.