Trade

Trump Shreds The Agricultural Trade Surplus

JM Ashby
Written by JM Ashby

The United States has a trade surplus in agricultural goods because we grow most of our own food and export what's left, but Trump's trade war has lowered the relative value of American farm goods so much that our surplus has plummeted as imports demand relatively higher prices than our own exports have over the past decade.

Our agricultural trade surplus is now at its lowest level in nearly 14 years but, for reasons that won't necessarily stand up to scrutiny, the Department of Agriculture expects a recovery next year.

The trade surplus is projected to total $5.2 billion in the fiscal year that ended in September, according to a government report updated Wednesday. Imported fruits and vegetables were more expensive than expected, and exports of corn and soybeans were lower than earlier projections, the U.S. Department of Agriculture said. [...]

An initial forecast for the 2020 fiscal year anticipates a recovery, with a surplus of $8 billion. Exports may be around $137 billion and imports at $129 billion, according to the USDA.

Commodity prices for things like corn, wheat, and milk were already dropping even before Trump launched a global trade war, but his trade war has made matters worse and we also have no concrete sign that it will end anytime soon.

The Department Agricultural may anticipate a recovery in 2020, but it's not clear what that recovery will be based on. The USDA could be basing that assumption on the idea that China will make large scale purchases of American farm goods as part of Trump's "greatest and biggest deal ever" but, as of today, it's still just as likely that Trump will escalate his trade war again and push our agricultural trade surplus closer to the brink.

Trump and Chinese President Xi Jinping could scale back their ambitions and sign a simple truce instead but that alone would not lead to a rebound in low commodity prices that are chipping away at the surplus. Even a more substantial deal may not accomplish that.

  • muselet

    US farmers can’t export as much as they have in the past and can’t ask for higher prices. Meanwhile, the price of imported produce has increased.

    This better be one whale of a great and big deal Donald Trump is cooking up, or his base will … vote for him with slightly less enthusiasm next year.

    *shakes head sadly; wanders off, muttering*

    –alopecia

  • waspuppet

    The Department Agricultural may anticipate a recovery in 2020, but it’s not clear what that recovery will be based on.

    “He’s gotta wise up sooner or later!”

    • Tony Lavely

      I’d hope for that, but I think it more likely a new barrel or two of the Koolaid was just opened.