Research Teams

China-U.S. trade dispute and its impact on global agricultural markets, the U.S. economy, and greenhouse gas emissions

ISSNYear: 2021
AutorAuthor/s: Carriquiry, Miguel, Amani Elobeid; Jerome Dumortier; David Swenson; Dermot J. Hayes


China is a major importer of agricultural products and we examine retaliatory tariffs imposed by China on U.S. pork, soybeans, corn, and wheat. We use an agricultural trade model to determine the impacts on agricultural commodity markets and combine our results with an input‐output model to measure economic effects in the United States. In addition, we calculate global greenhouse gas (GHG) emissions from land‐use change. The consequences of retaliatory tariffs are both trade destruction (lower overall trade) and trade diversion (trade diverted away from the U.S. and to other exporting countries). By the end of the projection period, total U.S. pork exports decline by 4.7%. Total soybean and wheat exports decrease by 31.2% and 0.5%, respectively whereas corn exports increases by 4.0%. Domestic U.S. retail pork prices decline by 0.8% and commodity farm prices decrease by 4.2%, 5.1%, and 15.8% for corn, wheat, and soybeans, respectively. The decline in foreign demand reduces U.S. production and welfare. Key among these impacts are a loss of nearly 15,400 jobs and a fall in labor income by $1.35 billion due to a $3.70 billion decline in national output at the beginning of the projection period. By the last year of the projection, the impacts grow to almost 30,000 fewer jobs and $2.31 billion less labor income. The U.S. economy experiences a loss of slightly under $6.80 billion in national output. Changes in trade due to the tariffs result in a reduction of GHG emissions from land‐use change of up to 83.7 teragram (Tg) of CO2‐equivalent.

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