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Report: Trade War Over Tariffs Could Cost Arkansas Farmers Millions

Arkansas ranks ninth in the nation in the value of grain sorghum produced annually, exporting the majority of it to China. (Arkansas Farm Bureau)
Arkansas ranks ninth in the nation in the value of grain sorghum produced annually, exporting the majority of it to China. (Arkansas Farm Bureau)
March 12, 2018

LITTLE ROCK, Ark. – If President Donald Trump's tariffs on steel and aluminum imports start a trade war, Arkansas could take an almost $400 million hit to its economy.

Agricultural economists at the University of Arkansas say if the state's major trading partners retaliate with similar import taxes on commodities such as soybeans, rice, corn and grain sorghum, the value of those products could drop precipitously.

Eric Wailes, a professor of agribusiness at the University of Arkansas, says the state is vulnerable because it is a major player in the global markets.

"More than half of our production gets exported,” he points out. “China is one of our major markets, particularly for soybeans and for sorghum. And basically there's just concern that the potential for retaliation, certainly by countries like China, is possible."

Wailes estimates a trade war could cause Arkansas agriculture to lose almost 4,500 jobs and reduce labor income by $261 million.

He adds that the loss of output could cost the oilseed farming sector $244 million and another $191 million in the grain farming sector.

Wailes and other economists at the University of Arkansas issued the analysis late last week.

Wailes says the United States is among the largest exporters of rice, corn, soybeans and sorghum in the world, and Arkansas ranks among the top producing states. He adds that the state ships grain to almost every corner of the globe.

"Our major export markets are Japan, China,” he explains. “The European Union is another important market, and then we've got South Korea, Taiwan. We export to well over 150 countries."

He says the impact of a trade war could extend beyond the farm belt to all of Arkansas.

"It reverberates in terms of impacts on the input sector, on the retail sector,” he stresses. “If we take a hit in terms of the value of our agriculture production, that reverberates throughout our entire state economy."

Wailes says markets lost to trade wars can take decades to rebuild, as numerous other countries – such as Brazil, Argentina and Australia – stand ready to jump in and sell their commodities.

Mark Richardson, Public News Service - AR