Christopher Barrett

Professor of Applied Economics and Policy

Chris Barrett, professor of public policy and economics at Cornell University, says the Trump Administration’s tariff policies have massively disrupted agricultural exports.

Barrett says: 

“The biggest example is that China hasn’t purchased, nor contracted for future purchase of, any U.S. soybeans since April. On that one crop alone, U.S. farmers have lost probably $6-7 billion in export revenue and counting. But we have also lost other markets, so the gross agricultural export losses will probably be well in excess of $15 billion by the end of the year.

“When U.S. tariffs resulted in a trade war with China in the first Trump Administration, USDA stepped in with bailout payments from two Market Facilitation Programs (MFP) in 2018 and 2019 that totaled ~$24 billion. MFPs used unallocated Commodity Credit Corporation (CCC) funds, so that Congressional authorization was not necessary. But today CCC has only about $4 billion available. So, any meaningful bailout would require appropriating general revenue, including tariff revenue. That’s a heavier lift, given many competing demands for scarce federal funds. 

“Tariffs and the ensuing trade war are the immediate spark for the current predicament, but the longer-term story is that US farmers have been steadily losing relative competitiveness in the global marketplace. In 2019, the US became a net agricultural importing country for the first time in the nation’s history. One big reason is relatively slow agricultural productivity growth. Brazil, China, and India have sharply increased their inflation-adjusted investments in agricultural R&D and thereby boosted agricultural output and net exports. By comparison, the US has cut public agricultural R&D by about one-third since 2002. Spending money on bailouts now rather than on R&D is politically expedient but just reinforces the problem of declining relative competitiveness in global markets.”