Fallout from trade tensions probably limited

The impact from the US-China trade tensions on both United States and New Zealand agricultural trade, including with China, is likely to be small, Prof Bill Bailey believes.

The US-based agribusiness expert expected the most likely outcome of the tensions was a negotiated settlement "where both sides give a little and gain roughly the same in return".

However, until that settlement was reached, there remained some limited potential for significant disruption to global agricultural trade, he said in ASB’s latest International Agri Insights report.

For New Zealand agriculture, the impact of President Donald Trump’s actions on  trade alignments and the potential resulting impact on NZ exports should be limited.

Much of the US agriculture industry remained very opposed to his actions. Farm groups had sponsored a variety of advertisements on farm websites that criticised the tariff moves.

How that lack of agricultural support for a major presidential initiative might affect the White House was not known; agricultural relations were a "major unknown" but could have a a negative impact on the upcoming Farm Bill and Nafta negotiations.

After Prof Bailey wrote the report, the Trump administration announced "consideration" of tariffs on a further $100 billion worth of Chinese imports.

Prof Bailey’s quick take was that it was more posturing that was to be expected, rather than an escalation of trade tensions as such.

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