Prices on goods sold in the United States are likely to increase as an extensive array of tariffs on foreign goods, particularly from China, remain in place, according to an agricultural economist with The Ohio State University.
“I don’t think we’ve seen the full effects of the trade war yet,” said Ian Sheldon, who serves as the Andersons Chair in Agricultural Marketing, Trade and Policy in the College of Food, Agricultural, and Environmental Sciences (CFAES).
The Trump administration first imposed a tariff on foreign steel and aluminum, then on a range of products from various countries including about 5,000 products made in China and sold in the United States. China and other countries have in turn raised tariffs on U.S. products sold in their countries, which has cut the demand for them.
“And the Chinese are showing no signs of backing down,” Sheldon said.
The tariffs the Trump administration imposed are intended to reduce the U.S. trade deficit by increasing the number of U.S. goods sold abroad and reducing the amount of foreign goods Americans buy. But that hasn’t happened, Sheldon said.
“In fact, it looks like the trade deficit is getting worse right now,” Sheldon said.
The trade deficit remains high because Americans consume too much and save too little, Sheldon pointed out.
He will discuss the impact of the tariffs and other aspects of trade at the Nov. 2 Agricultural Policy and Outlook Conference sponsored by CFAES’s Department of Agricultural, Environmental, and Development Economics.
The agenda for the conference includes:
- Barry Ward, director of Ohio State University Extension’s Income Tax School, will present “Farm Input Outlook.” OSU Extension is the outreach arms of CFAES.
- Ben Brown, program manager of the farm management program in CFAES, will present “Commodity Outlook: South American Focus.”
- Ani Katchova, associate professor and chair of the farm income enhancement program, will present “Ohio Farm Financial Conditions and Outlook.”
- An agricultural policy panel will include Carl Zulauf, CFAES professor emeritus; Fred Yoder, owner of Yoder Ag Services; and Kevin Elder, a producer.
Net farm income is expected to further decrease in 2018, the fifth consecutive year of low incomes, according to the U.S. Department of Agriculture. Since 2013, net farm income in the United States has been cut in half.
“There’s concern about how long this agricultural downturn is going to last,” Katchova said. “Five years is a long time for persistently low income.”
Commodity prices have gone down while the costs of operating a farm and producing crops have gone up, Katchova said. Record yields this year for corn and soybeans have not helped Ohio farmers increase their incomes because of the lower prices they’re getting per bushel for their crops, she said.
“You would think that in a year with record yields for corn and soybeans, income would go up, but that likely isn’t going to happen because of the low commodity prices,” Katchova said.
The conference will be held at Ohio State’s Nationwide and Ohio Farm Bureau 4-H Center located at 2201 Fred Taylor Drive in Columbus.
For more information about the conference, visit go.osu.edu/OutlookConference2018.