AG INSIGHT
AG INSIGHT BY J I M E R I C K S O N
Trade war costs continue to mount U.S. trade policies implemented five years ago continue today and their cost in the form of retaliatory tariffs that have sharply reduced this nation’s agricultural exports also continues to mount. A review of the recent trade war history includes these key developments: • Beginning in 2017, the United States initiated two trade actions. In April 2017, the U.S. Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to determine whether aluminum and steel were being imported in such quantities or under such circumstances to affect U.S. national security. In August 2017, the U.S. Trade Representative initiated a Section 301 investigation to determine whether China’s policies related to intellectual property and technology transfer were actionable under U.S. trade law. As a result of the Section 232 investigation, the United States applied tariffs of 25% on steel imports and 10% on aluminum imports from all suppliers, although exceptions were made for certain countries. Additionally, the Section 301 investigation found China’s policies were actionable, and the United States imposed a 25% tariff on a broad range of goods from China. • In 2018, the United States imposed tariffs on steel and aluminum imports from major trading partners and separate tariffs on imports from China. • Six trading partners then imposed retaliatory tariffs: Canada, China, the European Union (EU, including 8
Cooperative Farming News
the United Kingdom), India, Mexico, and Turkey imposed the levies on many U.S. exports, including a wide range of agricultural and food products. • Losses from retaliatory tariffs were concentrated among Midwestern States, with the largest losses among producers of soybeans, sorghum and pork. Among the states Iowa, Illinois, and Kansas have incurred the most lost revenues. • Retaliatory tariffs on U.S. agricultural exports have been costly for many states and ultimately affect the revenue that U.S. farmers receive. ERS
