The Impact of Trade Disputes on U.S. Agriculture: Data-Driven Approaches for Counterfactual Measurement

Project Summary

This research project aims at measuring the impact of trade disputes on agriculture in the United States. Because U.S. farmers and food processors sell a significant share of their production abroad, the growing number of trade disputes is a primary concern for the future viability of agriculture. However, so far, we know little about the implications of these policies because reliable counterfactuals for causal inference are generally unavailable. Therefore, this project aims at providing the necessary tools to precisely measure the impact of international trade disputes on U.S. agriculture. We accomplish this task by developing novel and innovative analytical methods based on machine learning techniques. These methods allow us to construct credible counterfactual trade flows, obtain a more precise identification of trade effects and evaluate the impact according to dispute characteristics, product specificities, and timing of trade measures. The analysis will enable us not only to assess the importance of trade disputes for agriculture in the United States but also to provide the necessary means to determine the impact of future trade disputes. Therefore, our project will enhance the understanding of a highly relevant foreign trade issue largely neglected in the empirical trade literature while being vital for the future of agriculture in the United States. Such understanding provides the foundation for a public discussion based on facts and allows for informed decisions. Consequently, our research will enhance market efficiency and performance by providing essential knowledge on the functioning of markets in light of trade disputes.

Project Objectives

The research will accomplish the following objectives:

Objective 1: Assemble a complete dataset of international trade disputes targeting U.S. agricultural exports from 1990 to 2018.

Objective 2: Prepare a time-consistent monthly dataset of U.S. foreign trade carefully disaggregated by specific products at the customs-district level.

Objective 3: Develop a novel statistical approach based on machine learning techniques to create credible trade flow counterfactuals and measure the impact of agricultural trade disputes more precisely.

Objective 4: Evaluate the impact of trade disputes on U.S. agricultural trade and explore differences in the trade impact according to dispute characteristics, product specificities, and timing of trade measures.

Funding Agency

National Institute of Food and Agriculture, Grant No. 2019-67023-29343 [Link]

Publications

• Global Container Shipping Disruptions, Pop-Up Ports, and U.S. Agricultural Exports, with Xiting Zhuang, Applied Economic Perspectives & Policy, 2023, first published online. [Paper]

• Retaliatory Tariffs and Container Shipping Disruptions Cause Considerable Trade Damages to California’s Almond Industry, with Xiting Zhuang, Choices, 2023, 38(2): 1–9. [Paper]

• The Impact of Maritime Shipping Disruptions on U.S. Tree Nut Exports and Inventories, with Xiting Zhuang, Agribusiness, 2023, 39(3): 904–911. [Paper]

• Agri-Food Trade Resilience among Food-Deficit Countries during the COVID-19 Pandemic, with Soojung Ahn, International Food and Agribusiness Management Review, 2023, 26(3): 397–408. [Paper]

• The Impact of COVID-19 Trade Measures on Agricultural and Food Trade, with Soojung Ahn, Applied Economic Perspectives and Policy, 2023, 45(2): 911–927. [Paper]

• Supply Chain Disruptions and Containerized Agricultural Exports from California Ports, with Colin A. Carter and Xiting Zhuang, Applied Economics Perspectives and Policy, 2023, 45(2): 1051–1071. [Paper]

• A Portrait of Firms that Trade in Meat Products, with Heidi Schweizer and  Xiting Zhuang, Western Economics Forum, 2022, 20(2): 6–18. [Paper]

• Exchange Rate Volatility and Global Food Supply Chains, Chapter in Risks in Agricultural Supply Chains, Editors: Pol Antras and David Zilberman, University of Chicago Press. [Paper]

• Port Congestion, Container Shortages, and U.S. Foreign Trade, Economics Letters, 2022, 213: 110392. [Paper]

• COVID-19 Trade Actions in the Agricultural and Food Sector, with Soojung Ahn, Journal of Food Distribution Research, 2021, 52(2): 51–75. [Paper]

Work in Progress

• The Impact of Retaliatory Tariffs on Agricultural and Food Trade, with Colin A. Carter, Journal of the Agricultural & Applied Economics Association, revise & resubmit, also published as NBER Working Paper w27147. [Paper]

• Pre-Trends and Trade Effects of Temporary Trade Barriers, with Armen Khederlarian, FREIT Working Paper 1781, under review. [Paper]

• Global Shipping Container Disruptions and U.S. Agricultural Exports, with Colin A. Carter and Xiting Zhuang, IATRC Working Paper 22-01, under review. [Paper]

• U.S. Agricultural Exports and the 2022 Mississippi River Drought, with Xiting Zhuang, under review. [Paper]

• The Impact of the 2018 Trade War on Foreign Trade of Canada, the United States, and Mexico, with Colin A. Carter, under review. [Paper]

• Exchange Rate Risk and Global Food Supply Chains, NBER Working Paper w29164. [Paper]

• Measuring the Impact of Sunset Reviews on Agricultural and Food Trade, with Sijia Chen. [Paper]

• Trade Diversion and the Initiation Effect: A Case Study of U.S. Trade Remedies in Agriculture, with Colin A. Carter, NBER Working Paper w24745. [Paper]

• The Impact of Trade Disputes on U.S. Agriculture: A Data-Driven Approach for Counterfactual Measurement, with Armen Khederlarian. [Paper]

Research Team