Economist: Partial Trade Deal With China Won't Rake In Big Money Promised For Agriculture
It looks like President Trump’s partial trade deal with China won’t bring in the promised $40 billion or so worth of agricultural trade for the U.S. this year.
Robert Johansson, chief economist for Department of Agriculture, expects the actual number will be closer to $14 billion — an increase of about $4 billion from a year ago.
In a speech at the agency’s annual outlook forum, he said the coronavirus known as COVID-19 is affecting China’s ability to purchase products from the U.S.
“Globally we’ve observed significant disruptions in shipping and supply chains,” Johansson said. “We would expect less spending by Chinese consumers, particularly in the first quarter.”
Johannson said this will affect China’s ability to purchase expensive products such as meat. This could hurt pork producers in the Mountain West because Chinese consumers eat a lot of American pork. Johansson predicted the country will rebound in the coming months.
Uncertainty in global markets and a disparity in how China and America count their fiscal years has also contributed to the lower trade prediction. When President Trump signed a partial trade deal with China in January, the Chinese government agreed to purchase between $40 and $50 billion worth of American agricultural goods.
IF OUR FORMALLY TARGETED FARMERS NEED ADDITIONAL AID UNTIL SUCH TIME AS THE TRADE DEALS WITH CHINA, MEXICO, CANADA AND OTHERS FULLY KICK IN, THAT AID WILL BE PROVIDED BY THE FEDERAL GOVERNMENT, PAID FOR OUT OF THE MASSIVE TARIFF MONEY COMING INTO THE USA!— Donald J. Trump (@realDonaldTrump) February 21, 2020
On Twitter over the weekend, Trump appeared to signal that more financial assistance was on the way for U.S. farmers and ranchers in light of the new trade prediction.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City, KUNR in Nevada, the O’Connor Center for the Rocky Mountain West in Montana, and KRCC and KUNC in Colorado. Follow Nate Hegyi on Twitter @natehegyi.