Agriculture could end up being one of the big winners of what was until very recently a looming trade war between the U.S. and China.
The two nations in March and April announced hundreds of billions of dollars in tariffs on each other and China’s proposed tariffs had largely targeted the United States’ agricultural sector.
But in a joint statement issued May 19 by the White House, the U.S. and China announced a framework that could reduce the United States’ $375 billion trade deficit with China.
The big winners look to be this nation’s agriculture and energy sectors.
During an interview with Fox News May 20, Treasury Secretary Steve Mnuchin said the nations are stepping back from a possible trade war.
He also said the U.S. expects to see a 35 to 45 percent increase in agriculture exports to China this year alone, as well as a doubling of U.S. energy purchases by China.
The U.S. exported $21 billion worth of agricultural products to China last year, making that nation the United States’ No. 2 export market for ag goods, behind Canada ($22 billion).
The joint statement issued by the White House said that at the direction of the two nations’ presidents, “the United States and China engaged in constructive consultations regarding trade in Washington, D.C.” May 17-18.
A consensus was reached to take “measures to substantially reduce the United States’ trade deficit in goods with China,” it stated. “To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services.”
Both sides, the statement added, “agreed on meaningful increases in United States agriculture and energy products. The United States will send a team to China to work out the details.”
Idaho Farm Bureau Federation President Bryan Searle, a farmer from Shelley, applauded the nations’ decision to move beyond threatened tariffs to reasonable solutions.
“We applaud both nations for choosing talks over tariffs,” he said.
China earlier this year announced it would impose tariffs of 15-25 percent on a long list of U.S. farm products, including wheat, corn, beef, fruit and wine, products that Idaho produces an abundance of.
Idaho’s beef cattle industry brought in $1.8 billion in farm-gate revenue last year, while the state’s wheat farmers received $415 million in total revenue for their 2017 harvest, according to University of Idaho estimates.
Grain corn in Idaho brings in about $70 million each year in farm-gate revenue.
Idaho’s fruit industry, which includes apples, peaches, pears, and cherries, brings in about $30 million per year.
An Idaho Wine Commission study showed the state’s wine industry has a $169 million annual direct and indirect impact on Idaho’s economy.
While neither the tariffs announced by the U.S. or China had gone into effect yet, the possibility that they could be imposed had caused concern among Idaho and U.S. farmers.
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