A Study of the Chinese Retaliatory Tariffs on Tree Nuts Industry of California

A Study of the Chinese Retaliatory Tariffs on Tree Nuts Industry of California

The objective of this study is to analyze the economic impact of Chinese retaliatory tariffs on California’s economy using the Input-Output model. Our model uses state level Impact Analysis for Planning (IMPLAN) dataset along with data from the United States Department of Agriculture-Foreign Agricultural Service (USDA-FAS), California Department of Food and Agriculture, and County Ag Commissioner’s reports. The analysis focuses on the implications of the retaliatory tariffs by China in a scenario where the demand from other alternate export markets does not change. The results show that the tree nut industry’s total output decreases by about 14% and 10% in the short-run and long run period respectively when compared to the baseline scenario. The tree nut sector would be employing about three thousand people lesser than the baseline scenario in the short-run period and about two thousand people in long-run period, which is equivalent to 7% in the short-run and 5% in the long-run period. The study concludes that it is very important for the US and China to resolve their trade disputes as quickly as possible in order to bring confidence not only to the tree nut industry in California, but hundreds of other industries that have been impacted by this trade war.

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Konduru, S., & Asci, S. (2019). A Study of the Chinese Retaliatory Tariffs on Tree Nuts Industry of California. Theoretical Economics Letters, 09(08), 2747–2755. https://doi.org/10.4236/tel.2019.98172