Trump's Trade War Leaves Texas at Head of Dark Path
Late last week, President Donald Trump opened the latest front in his ever-expanding trade war, announcing 25-percent tariffs on a long list of Chinese imports. The Chinese government responded in kind, creating similar tariffs on a bevy of U.S. agricultural products. While neither the U.S. nor the Chinese economy has experienced much fallout from the new policies, the United States — and Texas specifically — are vulnerable because of the current tariffs and the path on which Trump has set his administration.
The immediate risk to the Texas economy, according to Steven Cobb, the director of the University of North Texas' Center of Economic Education, is the potential harm Trump's tariffs could wreak on the state's agricultural exports to China, the world's biggest market.
"China seems to be cautious but specific in the way that they're reacting to the U.S. trade barriers," Cobb says. "They're picking particular industries for retaliation. In many cases, the targets have been agricultural. One of the targets has been soybeans. Sixty percent of U.S. soybeans are exported, and the biggest export market is China. [Soybean farmers] are a group that's going to be hit particularly hard by Chinese tariffs. That's not the biggest agricultural product we have in Texas; it's probably going to hit the Midwest a little harder, but it's still an export crop here in Texas."
In 2017, Texas farmers harvested almost 7 million bushels of soybeans, up nearly 2 million bushels over 2016, despite the effects of Hurricane Harvey. Farmers exported half of those bushels and China was their No. 1 market.
Read more: http://www.dallasobserver.com/news/how-will-trumps-trade-war-affect-texas-10893268
