Tuesday, August 06, 2019

How does China’s stopping imports of US farm products effect US farmers?

If you believe the media and politicians, US farmers lose a dollar of sales for every dollar less of US farm exports to China.

If China reduces its imports of US farm products, the most likely consequence will be its importing of more farm products from other countries to compensate. But that will create a new market for US farm products in the other countries to compensate for the increased exports to China.

The most likely impact, over time, of China reducing its imports of US farm products by a dollar is a loss a dollar of US farm sales to China and an increase of about a dollar of US farm sales to other countries.

If the media and politicians can't get something as simple as this right, imagine how right they are likely to be about their assessment of the implications of their economic proposals.

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