Iowa State University recently completed an economic research study of the effects of the on-going tariffs placed on American trade. The impacts of the trade tariffs certainly have hurt agriculture, but Dr. Chad Hart, an Iowa State University Agricultural Economist says the entire state’s economy has been negatively affected by the trade tariffs.
“The dispute with China probably cost us about a billion to two billion dollars in our overall state economy,” said Hart. “Due to the lack of ag took a major part of that cut, but we weren’t the only sector of the Iowa economy that was hurt by this. A lot of our manufacturing faced additional costs because of this. Like I say, here, you’re talking about probably when I think of our percentage basis, it’s about a half a percent hit to the overall state economy.”
Hart says Iowa’s soybean and pork industries suffered the largest hits, but he adds other commodities, such as the beef industry and the corn industry also suffered since the entire trade industry had slowed down. Hart says prices are still lower as a result of the trade tariffs. However, he says many commodity prices have started to rebound slightly since when the trade tariffs were initially announced. Hart says soybean prices had dropped nearly 20 percent. Now, they are down about 12 to 14 percent. The same can be said about pork prices.
“Pork…same sort of deal. They were down 15 to 20 [percent]… Now, actually, in some markets, we’re back to where we were pre-tariff. Because we have seen some additional sales to other countries, to offset the loss in China,” Hart said.
The agricultural economist says both the U.S. and China are still seeing growth in our economies, although it has slowed down considerably. He says what we need to watch is the global economy, and how the trade tariffs are affecting other nations.
“In fact, one of the biggest concerns we have out there as we look right now is that the global economy is really slowing down because of this trade dispute, and could possibly teeter into recession, especially as we look out in the future, if it lasts into 2020,” he said.
Hart says he expects to see commodity prices continue to show slight improvement through the spring months.