After nearly eighteen months of the trade war with China, the two sides came to a partial agreement last week. Phase One was signed at a White House ceremony demonstrating what many hope is the beginning of the end. What was agreed upon and what does it mean for the North Dakota farmers who have felt the brunt of the on-going trade war? Dr. Fayne Olson with NDSU Agribusiness and Applied Economics breaks it down.
Dr. Olson joined me on my KFGO radio show, “Afternoons Live” to discuss the Phase One agreement. I wanted to know what are the implications and key takeaways from an expert. You can listen to his breakdown below:
The rebound will be a lot slower. – Dr. Frayne Olson, NDSU Agribusiness and Applied Economics
The positive impacts of Phase One will likely take time to be felt by ND farmers. The market response to the signed agreement was rather neutral and a lot has changed as the trade war raged. China went elsewhere for some of their ag products. “We’re not going to go back to the way it was before.” Dr. Olson said.
My question is, will the slow rebound coupled with billions in federal farm aid be enough for the vast majority of family farms to continue? Recall, reports show the aid distribution went not only to large farms but southern farms.
The other notion that gives me pause is the history of behavior from China. Is there a loophole or out of some sort that means this isn’t the ultimate conclusion? For example, can Phase One be used as a bargaining chip in the negotiation for Phase Two? It seems everyone has agreed at some point that the practices of China in certain trade aspects have been suspect. That is why some cheered on the trade war. China had to be held accountable!
The signing of Phase One is a good first step, but should also be met with cautious optimism. The “pain threshold” of farmers questioned by Kevin Cramer was reached by many across the country over the last eighteen months. Some were unable to continue the work while politicians questioned their endurance. Will the band-aid and time heal and make whole? Let’s hope.