Removal of Trade Barriers Could Increase China’s Ag Imports

China imported more than $205 billion of agricultural products in 2021, including more than $37 billion from the United States. However, USDA Economic Research Service points out that trade barriers deterred China’s imports from reaching even higher levels.

China’s import barriers create what are called “price wedges,” in which domestic prices for agricultural commodities, including beef, corn, pork, and wheat, are higher than the world price. ERS recently found that removing price wedges would lead to increased agricultural imports for the four commodities over the next five to ten years.

For corn and wheat, removing price wedges was estimated to increase China’s imports by 91 and 249 percent, respectively. Both of these commodities are subject to a tariff-rate quota which could constrain additional imports.

Overall, the benefits of removing these trade barriers would be widespread, increasing sales for producers in the United States and other exporting countries and yielding lower food prices for China’s consumers.

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