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The Cost of Tariffs: U.S., China Trade War Resulted in Billions of Losses for Both Economies in 2018 — 5 Things to Know 

1. The trade war between the United States and China resulted in billions of dollars in losses for both sides in 2018. The auto industry, tech industry, and agriculture industry in the two countries took the biggest hits.

2. Specifically, “due to Beijing’s tariffs on soybeans, corn, wheat and sorghum alone,” the United States and Chinese economies each lost around $2.9 billion annually. China is the worlds largest soybean importer and relies on the U.S. for $12 billion worth of soybeans. With the tariffs, though, China has had to import soy from Brazil instead. For the U.S., this dropped the price of soybeans per bushel from $9.76 to $8.75 from July to December.

3. Overall in the agricultural industry, U.S. exports to China fell by 42 percent, or $8.3 billion, in the first 10 months of 2018 compared to a year earlier. Specifically, soy farmers in North Dakota, which exports crops to China, are facing “$280 million in losses because of Beijing’s tariffs.” Mark Watne, president of the North Dakota Farmers Union, added, “You could almost put another $100 million on top of this because all commodity prices are down and that affects North Dakota farmers indirectly.”

4. Not only did the U.S. and China lose money in the agricultural market, but “China also suffered as products such as phone batteries were hit by U.S. tariffs, and customers began looking to buy from other countries.” Specifically, tariffs on imported Chinese products cost the tech industry $1 billion per month.

5. Retail, manufacturing, and construction also drove losses after the tariffs were imposed. The Dallas Fed said, “Input price pressures remained elevated in part due to tariffs, particularly in manufacturing and construction, and firms were struggling to pass these higher costs onto customers.” GM, Ford, and Fiat Chrysler said tariffs will cause a loss of $1 billion for each of their companies in 2018.

Source: https://www.reuters.com/article/us-usa-trade-china/trade-wars-cost-u-s-china-billions-of-dollars-each-in-2018-idUSKCN1OR1JH

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