In recent months, the United States and China have been engaged in an escalating trade war that has included retaliatory Chinese tariffs on tens of billions of U.S. exports, with particular concentration in the agricultural sector. Despite a recent pause in the escalation, the effect on U.S. farmers has been devastating.

In a new policy study, R Street Trade Policy Counsel Clark Packard explains the consequences of this tit-for-tat trade war and recommends several policy responses that can help reverse course and make significant strides forward before the damage is too extensive to be undone.

The report reveals that, due in large part to the trade war, U.S. agricultural exports to China have fallen from $22 billion in 2017 to a projected $9 billion in 2019, the lowest level since 2007. In response, the Trump administration has authorized $30 billion in trade mitigation assistance to farmers, in effect reviving the “direct payments” program that Congress discontinued in 2014. A more effective approach to confront China over legitimate trade grievances would be to initiate multilateral action with other trade partners, such as through the World Trade Organization or by rejoining the Trans Pacific Partnership.

The author adds, “Instead of seizing the opportunity to push forward with efforts to open up foreign markets, from trade wars and protectionist bailout schemes, the Trump administration’s policies have moved in the opposite direction to the great detriment of one of our greatest and most productive American assets—our ranchers and farmers.”

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