American farms face long-term losses from trade war, says BCG

Bloomberg

US farmers and agribusinesses face a rising threat of long-term losses in export sales as President Donald Trump’s trade war with China continues, Boston Consulting Group (BCG) warned in a report.
The finding by a blue-chip management consulting firm could feed mounting fears among major US agricultural players that the damage done from a tariff war that has already dragged on for more than a year will extend long after a deal is reached and a $28 billion trade aid programme for farmers ends.
The hit to exports has already strained a farm sector beleaguered by a six-year slump in prices for agricultural commodities and a string of wild weather this year.
Other nations are filling the gap in China and making investments to expand their production capacity, improve transportation networks and deepen relationships with importers, eroding US competitive advantages that took decades to develop, the analysis found.
It will be difficult for US agriculture to find “meaningful” alternative export markets to make up losses in China because of regulatory hurdles, protectionist barriers and US trade conflicts, the report added.
“The growing risk is that much of the market share abroad that US agribusiness is losing to foreign competitors will be hard, if not impossible, to win back — even if current trade conflicts are resolved to the US government’s satisfaction,” the study concluded.
If Chinese customers fear more trade conflicts down the road and begin to question the US as stable source for farm products, importers over time may “completely unwind complex relationships with US suppliers,” the authors predicted.