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APR: Winter 2020 Articles

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The State-level Burden of the Trade War: Interactions between the Market Facilitation Program and Tariffs

Edward J. Balistreri (ebalistr@iastate.edu), Wendong Zhang (wdzhang@iastate.edu), and John Beghin (beghin@unl.edu)
As the Trump Administration works with China’s President Xi to pen a new US-China trade deal, Ed Balistreri, Wendong Zhang, and John Beghin examine the current US-China trade war and its uneven distribution of impacts on US states. The authors find that the distribution of Market Facilitation Payments created “winner” and “loser” states; that is, for some states, the MFP payments totally offset the incidence of tariff retaliation, and for others they don’t. Interestingly, they note that while most of the winner states are “red” states that voted for President Trump in 2016, key “purple” battleground states, such as Michigan, Ohio, Wisconsin, and Pennsylvania, didn’t receive large enough MFP payments to offset tariff retaliations.

Balistreri and Zhang are both CARD economists that have examined the US-China trade war in depth. They both helped author “The Impact of the 2018 Trade Disruptions on the Iowa Economy,” a CARD series paper that was the first to determine the fiscal impacts the US-China trade war would have on Iowa’s economy.

New Farm Bill, New Decisions, New Tools

Alejandro Plastina (plastina@iastate.edu)
CARD and extension economist Alejandro Plastina provides an in depth look at the major changes the 2018 farm bill brought to the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs for farmers. Plastina provides readers with information on how the programs work and how farmers can get enrolled and links to valuable resources such as the ARC-IC payment calculator.

Plastina is a CARD and Extension economist specializing in agricultural production and technology, with an emphasis on farm business and financial management.

The Phase One Trade Deal: Projections and Implications

Chad Hart (chart@iastate.edu) and Lee Schulz (lschulz@iastate.edu)
Chad Hart and Lee Schulz examine the “Phase One” trade deal and determine how it will affect US imports and exports and trade relations with major trading partners. Hart and Schulz find that the USMCA and Japan agreements concentrate on solidifying existing trade flows, rather than significantly expanding trade opportunities. The new trade deals maintain and protect US trading relationships with Canada, Mexico, and Japan, with the prospect for continued, but limited, growth. The China deal, on the other hand, has the potential to radically change global trade flows. Hart and Schulz are both CARD and Extension economists. Hart is a crop market specialist and Schulz is a livestock industry specialist. Schulz and Hart’s APR articles examine the largest factors currently influencing some of the United States’ largest agricultural industries (Production Projections and Trade Adjustments and Volatile Prices and Profit Margins).

Implications of a US Carbon Tax on Agricultural Markets and GHG Emissions from Land-use Change

Jerome Dumortier (jdumorti@iupui.edu) and Amani Elobeid (amani@iastate.edu)
The Energy Innovation and Carbon Dividend Act, which proposes a carbon tax of $15/ton of carbon dioxide equivalent, was introduced to the House of Representatives in 2019. Jerome Dumortier and Amani Elobeid use a CARD model to assess the impacts of the carbon tax on agricultural producers and find that while farmers could face higher productions costs, a projected increase in commodity prices and a projected decrease in crop area lessens the effects on profitability.

Amani Elobeid is an international sugar and ethanol analyst at CARD. Her past APR articles have examined the impact of African swine fever on US and world commodity markets and the linkages between agriculture and energy in Iowa’s biofuels industry.