The Problem with Trade Wars and Implications for Crop Inputs

The problem with trade wars is that there always a winner and loser (or in some cases losers). And while in the short term the victory might feel good, even justified, it’s the long-term effects that must be considered. Currently, the U.S. and China have imposed import duties totaling more the $300 billion on each other’s goods – including some crop input products.

The two countries are in the midst of a trade war whose ultimate resolution has yet to be determined. The immediate impact has certainly hurt both sides, particularly the growers, though a recent truce has China once again importing soybeans, easing the initial burden. The truce is scheduled to last until March.


In the meantime, both sides seem eager to resolve the situation long before then. The Chinese foreign ministry said Monday that both sides have expressed finding a way to end the dispute. And a deputy U.S. trade representative was in China Monday and Tuesday for two days of discussions that hopefully could lead to an end to the conflict.

U.S. President Donald Trump exercised his usual optimism stating: “We have a massive trade negotiation going on with China. President Xi (Jinping) is very much involved, so am I. We’re dealing at the highest levels and we’re doing very well.”

For its part, China seems willing to negotiate. “Both China and the U.S. agreed to follow through on the consensus reached by both leaders to conduct positive and constructive talks in resolving our dispute,” China’s foreign ministry spokesman Lu Kang told reporters on Monday.

In the meantime, stock markets will soar and sink on rumors (both U.S. and Chinese stock markets were up – at least as talks began Monday), growers will continue to wonder how this will all play out, and governments will do whatever they can to come away saving face. Maybe, just maybe, we can come out of this with more than just one winner.