Trade Outlook: China Loses Ground for U.S. Agriculture

A trade specialist believes trade between the U.S. and China will continue to decline. Dr. Sam Gregg with the American Institute for Economic Research says U.S. agriculture has benefitted from trade with China, but the relationship took a turn in 2012.

“A very different economic approach, the state began taking a much bigger role in the Chinese economy. That’s when you see trade starting to decline between the United States and China.”

Speaking during the Iowa Farm Bureau Economic Summit in Ankeny, Iowa recently, he said Chinese industrial policy is an example of why the U.S. should look elsewhere for trade.

“I think it’s severely distorting their economy in ways that I think it’s going to make it less and less optimal for America to trade with China. Because I think people talk about China as being the coming economic power, I don’t think so. I actually think China is in huge economic difficulty.”

Gregg says India holds tremendous potential for U.S. ag exports.

EDITOR’S TAKE:

It has been a rollercoaster ride with China in recent years when it comes to agricultural trade. The Chinese government often uses purchases of U.S. ag products as a retaliatory mechanism during a dispute with our country. Most ag leaders do want to maintain a solid relationship with China but often find it difficult at best. Seeking other trade relationships, especially with larger nations like India, is a preferred strategy and longer-term answer to smoothing out the ups and downs of Chinese trade practices.

To help farmers/ranchers deal with these disruptions, why not finance their next purchase with CADFI? It is the finance option specifically designed to match payment schedules to income streams, be they weekly, monthly, quarterly, etc. The farmers/ranchers can also finance the purchase of a product from one of our AgPack® partners. It’s a great tool for that farm/ranch customer.