b'TRADE WAR BRUISINGCOULD LEAVE SCARSThe trade battle isnt just a sparring of words and numbers. Economists show the bruises are real and the long-term consequences detrimental.Julie Deering jdeering@issuesink.comA YEAR AGO,a team of researchers led by The Ohio StateTo help ease the pain, the U.S. government organized a market University received a grant to study how tariffs affect food,facilitation program (MFP) payout of nearly $30 billion. A second water and energy in Americas heartland. Coincidently, thatsMFP payout is on the way but the amount hasnt been set.about the same time that President Trump started the tariffAs such, Glauber anticipates increasing concern from World tit-for-tat with China. Now, its not just scientific modeling thatTrade Organization members about another government payout serves as the base for these numbers, but real evidence. to farmers.Brought on by forced technology transfer, discriminatoryLeaders from the United States and China are working to end licensing restrictions, theft of intellectual property, investmentthe bruising, with exemptions given and promises of government restrictions and subsidies to state-owned enterprises,commitments. Trumpas he campaigned onwas intent on getting tough on China.While many in agriculture supported this notion and the mindset of a little pain for long-term gain, no one anticipated just how much pain China or U.S. farmers might have to endure.In December, Chinese tariffs on U.S. goods are set to increase to 25.9%, while the rest of the world sits at 6.7%.September through January is typically the time of year whenThis power-based approach is the most aggressive the United States would be shipping a lot of soybeans to China,weve seen in more than a decade. Its creating says Joe Glauber, a senior research fellow with the International Food Policy Research Institute in Washington, D.C. uncertainty in trade and markets. Nearly two months into peak season, U.S. soybean exports Amanda Countrymanfor the week of Oct. 10 are 956,108 metric tons, down 40% from the five-year average. However, accumulated exports for the same report werent as distressing, coming in at 4,984,317 metric tons, down just 12.2%.Jason Grant, who serves as director for Virginia Techs Center for Agricultural Trade, reminds that at the end of summer 2018 (when China would normally shift from buying in Brazil and South America to the United States), commercial buyers boughtIn the meantime, if the trade war with China continues, Grant everything they could get their hands on from South America. says the risk to U.S. market share is considerable.Soybean prices out of the Paranagu and the U.S. Gulf wereIts tough to predict whether we will be able to rebuild similar, shares Grant. But when theres a 25% tariff on U.S. soy- market share, he says. In 2012, China began a major initiative to beans, it created a huge divergence for buyers. diversify where it sourced products.Some new buyers out of Europe and Egypt were attracted toIn 2012, 26% of the agricultural products China sourced came lower U.S. prices, but Glauber recognizes the sectors commer- from the United States. In 2018, that number was 12%, and this year cial growth came from China. it has been 8%, as indicated by data from January through May.As the trade war has expanded, so has its impact on agriculture,Grant adds that when the tariffs where first announced, soy-explains Amanda Countryman, aColorado State University agbean prices decreased 20% and have since bobbed around.economist. Its not just soybean growers who have been impacted,Whats in store for the future? Analysts share concerns and but also those who grow and export alfalfa, barley, peanuts, rice andspotlight possible market gains.other crops, she shares. In 2018, U.S. farmers produced a record number of soybeans 12/ SEEDWORLD.COMDECEMBER 2019'