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Ongoing trade tensions could impact long-term demand

An ag economist at Ohio State University says ongoing trade tensions could impact demand for US agricultural products.

Ian Sheldon says large trading partners are starting to divert sales to other markets.

“What’s happening with China is just exacerbating a shift that was already happening before the previous trade war,” he says. “The new trade war is just going to speed up that process across a broad range of commodities.”

He tells Brownfield as the US tries to create new market opportunities, many countries could be hesitant to make agreements.

“I think the problem that we face is figuring out where our new export markets are,” he says. “Where are we going to divert that trade to because the US market is saturated and we have plenty to eat, but our major markets are obviously China, Mexico, Canada and the EU.”

Sheldon says farmers are starting to feel the impacts.

“Farmers are facing downward pressure on quantity prices, they’re worried about their margins, their input costs,” he says. “Perhaps it’s pushing farmers to think a little bit more carefully about how this could be more harmful than they had originally thought.”

With retaliatory tariffs to take effect this week, Sheldon warns it could create additional challenges for US agriculture.

AUDIO: Ian Sheldon, Ohio State