What a trade war with China would mean for NC

What's the Deal

The possibility of a trade war with China is worrying farmers in North Carolina because agricultural exports from this state are a $4 billion a year business which could be impacted if the Chinese impose tariffs.

Any Chinese tariffs on American commodities would have a ripple effect here in North Carolina when it comes to agriculture.

Hogs are among the things the Chinese said they would impose tariffs on if it comes down to that and North Carolina is the second largest producer of hogs in the world.

Experts say a tariff on swine would affect more than just local farmers.

“Farmers contract with large conglomerates like Prestage Farms or Smithfield Foods and produce hogs for them and those companies are at risk as well,” explained Dr. Blake Brown, professor of Agricultural Resource Economics at N.C. State University.

If the farmers can’t export their hogs, it affects other sectors of the state’s agriculture economy, for example — soybean farmers whose crops are used to help feed hogs and poultry in this state.

The Chinese Commerce Ministry produced a list of tariffs on American goods that would total in the billions of dollars if enacted and a Chinese economist tells CBS News their government is serious about that if it comes down to a trade war.

“I don’t think they can let it go,” said Tianjun Wu. “I mean Just looking domestic politics, it would be showing weakness to just let it go.”

And U.S. commodities have to be sold beyond our borders. There is only so much of those commodities we can consumer domestically.

“Agriculture operates in a global economy with the U.S. being a major exporter for a lot of different products,” said Brown.

And just how much do agriculture exports to China contribute to North Carolina’s economy? The North Carolina Agriculture Commissioner Steve Troxler told CBS 17 in an email: 

“China is a significant trading partner, particularly with regards to tobacco and soybeans. The Chinese market accounts for 16 percent of our total ag exports. Three out of every four rows of tobacco go to the export market, a third of our pork is exported.”

So, any kind of tariffs or trade war with China would be a significant problem for North Carolina farmers and something Troxler hopes can be avoided.

“We have been concerned about the potential for a trade war, and certainly don’t want to see one happen,” said Troxler.

However, experts like Brown say all this fussing over tariffs may not have a negative impact on our state agriculture, if it leads to negotiations which result better terms of trade.

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