The State-level Burden of the Trade War: Interactions between the Market Facilitation Program and Tariffs

Edward Balistreri, Wendong Zhang () and John Beghin ()

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: As the Trump Administration works with China's President Xi to pen a new US-China trade deal, Ed Balistreri, Wendong Zhang, and John Beghin examine the current US-China trade war and its uneven distribution of impacts on US states. The authors find that the distribution of Market Facilitation Payments created "winner" and "loser" states; that is, for some states, the MFP payments totally offset the incidence of tariff retaliation, and for others they don't. Interestingly, they note that while most of the winner states are "red" states that voted for President Trump in 2016, key "purple" battleground states, such as Michigan, Ohio, Wisconsin, and Pennsylvania, didn't receive large enough MFP payments to offset tariff retaliations. Balistreri and Zhang are both CARD economists that have examined the US-China trade war in depth. They both helped author "The Impact of the 2018 Trade Disruptions on the Iowa Economy," a CARD series paper that was the first to determine the fiscal impacts the US-China trade war would have on Iowa's economy.

Date: 2020-02
New Economics Papers: this item is included in nep-int
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