Trade wars are hitting the US farm machinery industry, as the trade war between the US and China escalates.
Alex Black and Howard Walsh report...
It comes as the US launched an aid package for farmers affected by the trade tensions. The US Department of Agriculture planned to allocate $16 billion (£12.65bn), including $14.5bn (£11.47bn) in direct payments to producers through the Market Facilitation Programme.
American NFU president Roger Johnson said farmers appreciated the USDA’s work to mitigate losses, as low commodity prices and excess production compounded the issues.
But he added it was a short-term fix for a ‘very long-term problem’. Despite numerous talks since the beginning of last year, China and the US were yet to reach a compromise.
Search engine for used machinery, Trademachines.com, said the ramifications were both serious and intriguing.
Since China joined the World Trade Organisation in 2001, the American trade deficit with China has multiplied by a factor of 4.5.
However, Trademachines.com said it was not China’s fault, but US companies taking advantage by manufacturing abroad and importing goods.
It said: “For several experts, the hidden purpose of this trade dispute is mostly geo-political. In the early 2000s, China was far behind the US in terms of technologies and worldwide influence, in less than 20 years, it caught up. De-escalating the tensions is the only way to put a stop to this trade war.”
One of the impacts was on the used farm machinery market, with China refusing to ‘bend the knee’ to Donald Trump’s trade tactics.
Concern has grown for American farmers, with Chinese tariffs on imports such as dairy products impacting markets, harming returns and reducing desire to invest in new products.