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Illinois researcher quantifies impact of China’s tariff rate quota on US grain exports

A new study from the University of Illinois shows China’s tariff rate quota (TRQ) policy significantly impacted US grain exports ahead of the trade war.

Lead author of the study Bowen Chen tells Brownfield they estimate China’s 2017 grain imports from the US could have been $1.4 billion or 40% higher without the restriction and wheat was hit the hardest.

“The US wheat exports to China may have been reduced by around 80%.”

He says China uses the two-tiered TRQ system to make foreign commodities more expensive, therefore giving more incentive for domestic producers.

Chen says the new phase one trade deal between the US and China includes changes to tariff rate quota administration and will likely bring more benefits to US grain exports.

Chen says his next research project will focus on quantifying the impact of the trade war on US soybean exports to China.