Newswise — China’s call to impose tariffs on $3 billion worth of U.S. products, a response to President Trump’s push to Implementing tariffs on China, could lead to a trade war that will hurt both countries, say experts from Virginia Tech.
“We’re looking at game-theory playing out on the world stage in real time,” said Virginia Tech ‘s Mary Marchant, a professor of agricultural and applied economics. “And that theory predicts that both countries lose in the end. Protected sectors may gain, but overall, the results of trade war are bad for both countries’ economies.”
U.S. agriculture – which exported $20 billion to China in 2017 – “will likely be one of the first, and worst hit, industries that gets caught in the cross-fire,” said Virginia Tech’s Jason Grant, an associate professor of agricultural and applied economics.
Quoting Mary Marchant
“China is our number one market for agricultural products – specifically soybeans are the number one U.S. export to China. And if China implements tariffs on soybeans, which it is likely to do if things don’t settle down, the results could be devastating for U.S. farmers. China has been diversifying its suppliers and these tariffs could expedite this process and leave U.S. producers in a lurch. What we need is cool heads to prevail to deescalate the situation. China and the U.S. have a synergistic relationship and we need each other; right now we just need leaders that promote this.”
Marchant is a professor in the Virginia Tech College of Agriculture and Life Sciences. Her research examines the impact Chinese policies have on U.S. agricultural trade, with an eye toward increasing U.S. market access to China. She leads a team of Chinese and U.S. researchers that provide analysis to China’s unsteady trade policies. She has focused her research efforts on Chinese markets for over a decade and is affiliated with the Virginia Tech College of Agriculture and Life Sciences’ Center for Agricultural Trade, which promotes agricultural trade through research, education, and outreach.
Quoting Jason Grant
“There are formal channels in place within the World Trade Organization that are designed to ameliorate disputes like these and disregarding them undermines the credibility of this organization.”
Grant has performed economic analysis for the Office of the Chief Economist of the United States Department of Agriculture, including an analysis that quantified the benefits and drawbacks to the controversial Trans-Pacific Partnership in 2016. Grant directs the Virginia Tech College of Agriculture and Life Sciences’ Center for Agricultural Trade, which promotes agricultural trade through research, education, and outreach.
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