Economists have warned that U.S. President-elect Donald Trump’s proposed tariffs could trigger retaliatory measures, leading to significant losses for California’s agriculture industry, The Los Angeles Times reported on Sunday.
A recent analysis, published by the University of California’s Giannini Foundation of Agricultural Economics, examined potential scenarios involving tariffs and retaliation.
If a major trade war were to erupt, the report said, California’s agricultural exports could decline by as much as 25 percent, resulting in annual losses of up to 6 billion U.S. dollars. California’s agricultural sector generates billions of dollars from exporting products such as pistachios, wine, and other goods to countries including China, Mexico, and Canada.
The study also pointed to some of the most vulnerable commodities, including pistachios, dairy products, wine, and almonds, all of which are exported in large quantities to China. Researchers from the University of California, Davis, and North Dakota State University identified these products as especially at risk in the event of a trade war.
“The worst-case scenario is pretty bleak,” Sandro Steinbach, director of North Dakota State University’s Center for Agricultural Policy and Trade Studies was quoted as saying. “Basically, tariffs are harmful to U.S. agriculture, and to California agriculture in particular, because they will invite tariff retaliation.”
If the Trump administration were to impose large tariffs in the most extreme scenario, retaliatory measures by other countries could have a ripple effect throughout California. This would impact everything from the vast almond orchards of the Central Valley to the small family-run vineyards scattered throughout the state’s wine country.
“Rather than pursuing policies that invite global retaliatory measures, the United States should work toward more balanced trade agreements that protect domestic industries without sparking harmful trade wars,” researchers noted.
“All countries involved in a trade war lose, and California agriculture simply cannot afford another trade war,” they added. ■