Will ND agriculture weather the trade conflict with China?

There appear to be two sides to the controversy over an escalating trade/tariff conflict with China.

Some believe it is pointless and will only hurt U.S. consumers and, in particular, farmers and ranchers who do business with China. After all, the argument goes, tariffs on Chinese goods are most likely going to passed on to U.S. consumers. Meanwhile, producers (including agricultural ones) are going to face higher Chinese tariffs and pay for it when China then acquires products from other nations with lower cost.

On the surface, and on the face of it in the short term, the argument makes sense.

However, the other side of the debate – in particular President Donald Trump and his economic advisors – believe that the long-term results of tariffs will benefit not just exporters, but also the stock market and the economy overall. China, they say, is less able to maintain its economic standing in the face of new, high tariffs on goods sent to the U.S., than the U.S. is capable of continuing its growing economy despite Chinese retaliatory increases in tariffs. Furthermore, China’s economy which has surged for years, has been benefiting from unfair trade practices, pre-existing tariffs, theft of Western intellectual property, etc. This argument asserts that when China eventually capitulates, more fair and open trade will be a massive boon to U.S. producers and the economy. It would be a game changer in the minds of proponents of the get tough on China on trade policy.

On the surface, and on the face of it in the long term, the argument makes sense.

With agriculture a notable target of Chinese tariff policy in the escalating conflict, North Dakota is particularly vulnerable to the impact.

While the agriculture community has expressed a diversity of opinions to Minot Daily News and other media outlets and elected officials, sizable protest efforts haven’t developed and President Trump remains popular in the state – and here that means at least good percentage of farmers and ranchers would seem to be supportive. It’s notable that our representatives in D.C. have generally been supportive of the Trump administration trade efforts as well.

However, will that last and, if so, for how long? Is there going to be a point where the impact of Chinese tariffs take such a toll on agriculture that the majority of the ag community in North Dakota will reject the White House’s policies on trade?

It only seems reasonable that a mass movement from farmers and ranchers would get the attention of the state delegation in D.C., perhaps even pressuring our representatives to reconsider their positions on the current trade efforts. Given that other states with sizable agriculture based economies are in the same position, it creates a quandary on a national scale.

Can North Dakota’s agriculture industry weather the impact of the trade conflict with China? If so, for how long? Is the will there to outlast a prolonged conflict?

Only time will tell.


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