Trade War: Disadvantageous for U.S. and China

Trade War is never a good idea, especially when it’s between the first and second largest economies in the world. However, this will also affect the regular person, and here’s how:

For the U.S., where there was an estimated 2.05 Million farms in the U.S. in 2017, according to United States Department of Agriculture, tariffs on farm goods are causing issues. Since China is the biggest soybean importer, the tariffs caused the price of soybeans to drop significantly. According to the WSJ, "Chinese buyers have sharply reduced orders for U.S. soybeans and other crops like corn and sorghum while boosting purchases from Brazilian farms instead." Soybean prices dropped 18% compared to the beginning of June, which is the historical low in decades.

USA TODAY mentioned that the situation is “killing farm income," and that the net farm income is “expected to drop another 6.7% this year, to the lowest level since 2006 which will be the lowest level since 2006.”

Moreover, an article from CNBC mentioned that research conducted by Federal Reserve concluded that 40% of the people in the U.S. could not bear a USD 400 unexpected expense, which means they have to borrow or sell something to make up the expense. This trade war will only exacerbate the needs of those people and unfortunately leave them with even less help to rely on.

As for the other side of the conflict, Since China is a country which is heavily dependent on exporting goods to the U.S. market, a trade war is also undesirable. According to the Census Bureau, U.S. imported USD 505,470.0 Million in the year 2017 and only exported USD 129,893.6 Million.

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