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QINGDAO TODAY
在线翻译:
szdaily -> World Economy -> 
Trade tensions cost US, China billions each
    2019-01-03  08:53    Shenzhen Daily

THE U.S.-China trade spat resulted in billions of dollars of losses for both sides in 2018, hitting industries including autos, technology — and above all, agriculture.

Broad pain from trade tariffs outlined by several economists shows that, while specialized industries including U.S. soybean crushing benefited from the dispute, it had an overall detrimental impact on both of the world’s two largest economies.

The losses may give U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, motivation to resolve their trade differences before a March 2 deadline, although talks between the economic superpowers could still devolve.

The U.S. and Chinese economies each lose about US$2.9 billion annually due to China’s tariffs on soybeans, corn, wheat and sorghum alone, said Purdue University agricultural economist Wally Tyner.

Disrupted agricultural trade hurt both sides particularly hard because China is the world’s biggest soybean importer and last year relied on the United States for US$12 billion worth of the oilseed.

China has mostly been buying soy from Brazil since imposing a 25 percent tariff on American soybeans in July in retaliation for U.S. tariffs on Chinese goods. The surge in demand pushed Brazilian soy premiums to a record over U.S. soy futures in Chicago, in an example of the trade war reducing sales for U.S. exporters and raising costs for Chinese importers.

“It’s something that’s crying for a resolution,” Tyner said. “It’s a lose-lose for both the United States and China.”

Total U.S. agricultural export shipments to China for the first 10 months of 2018 fell by 42 percent from a year earlier to about US$8.3 billion, according to the U.S. Department of Agriculture.

The most actively traded soybean futures contract averaged US$8.75 per bushel from July to December 2018, down from an average of US$9.76 during the same period a year earlier.

As of Dec. 28, futures in the last month of the year were averaging US$8.95-1/2 a bushel. That was down from US$9.61-3/4 for all of December a year ago.

To compensate suffering farmers, the U.S. government has allocated about US$11 billion to direct payments and buying agricultural goods for government food programs, after consulting economists, including Tyner.

In North Dakota, which exports crops to China through ports in the Pacific Northwest, soy farmers face at least US$280 million in losses because of China’s tariffs, said Mark Watne, president of the North Dakota Farmers Union. (SD-Agencies)

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