What does a potential $30 billion ag trade deal with China look like?

The U.S. and China appear to be making progress in trade talks and China has proposed buying an additional $30 billion of U.S. ag goods as part of a deal.

But an ag economist says there are things to keep in mind with any potential agreement.

“So, what does $30 billion mean, what does it look like because China has just dropped off,” he says. “If we use 2012 through 2017 data it’s one thing if we double or triple or add $30 billion to that, but if you look at 2018 data it’s not that big of a change.”  

David Widmar with Ag Economic Insights says a U.S.-China trade deal would be good news for the agriculture industry, but the question is what it will look like.  

He says an agreement to purchase an additional $10 billion over 2018 levels would be necessary to return to pre-Trade War activity.

“Are we going to go back to the levels we have had or are we going to continue to grow,” he says. “Or are we going to enter this new era- almost the new promised era of trade with China sort of breaking away of where we’ve been in the past.”

Widmar says there is the question of timing and how long a purchase agreement would last.

“We have to keep in mind if this trade package has a long timeframe a lot of that promise or that commitment is going to be continued growth of a trend that we’ve seen play out already over the past 10-15 years,” he says.

He says there’s also the question of what commodities would be included and the potential impact on overall U.S. exports.  

Audio: David Widmar, Ag Economic Insights

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