The environmental consequences of trade wars

The impact of trade wars is felt not only in the economy, but also in the environment. Farzad Taheripour, research professor of agricultural economics, outlined some of the environmental impacts of the U.S. trade war with China in a paper published in Nature Food.

When tariffs on U.S. soybean and corn imports in China skyrocketed due to trade tensions, China found an alternative source in Brazil, which sends roughly three-quarters of its soybean crop to China.

Commentators note the impact on the economy and farmers. “What is discussed less is that when the supply and demand shift, so do the environmental impacts,” Taheripour explains. “The demand for irrigation, fertilizers and insecticides and how they are all utilized changes.”

Along with coauthors Guolin Yao, Xin Zhang and Eric A. Davidson, Taheripour describes the repercussions. In some cases the environmental result can be positive, if nutrient pollution and water-use efficiency improve with a new crop or more efficient growing location.

That hasn’t been the case for Brazil, which has less arable land than the U.S. and generally less advanced agricultural technologies. “In this case, as Brazil produces more corn and soybeans for China, you get more deforestation to make new fields and greater emissions, because farming is less efficient,” Taheripour says. “A hectare of deforestation in the U.S. has less of a global environmental impact than a corresponding amount in Brazil,” he adds, based on the biodiversity of areas like the Amazon.

Policymakers don’t always consider long-term, compounding environmental effects when making decisions. Taheripour hopes his work gives them as much information as possible about potential trade policies.