LITTLE ROCK (KATV) - Overnight Wednesday, Chinese officials announced a new list of U.S. imports they intend to slap a 25-percent tariff on in what's shaping up to be a trade war between the world's two biggest economies.
Earlier in the week, China had announced tariffs on pork and other U.S. exports - but now you can add soybeans, cotton and sorghum to the list - three of Arkansas's biggest cash crops.
Matt King, Arkansas Farm Bureau commodity economist, said just the threat of tariffs sent the price of soybeans tumbling on Wednesday. King said the worry is that a lower Chinese demand for American crops would send commodity prices into a downward spiral.
"If you take away that market from the U.S. where we're not going to get as large of a share of that market - the next largest market to China is only about 10-15 percent of what China is," said King.
According to a report from the University of Arkansas Division of Agriculture, researchers estimate retaliatory Chinese tariffs could "adversely affect Arkansas employment by around 4,438 jobs, reduce labor income by $261 million and reduce overall value-added to the state economy by $383 million."
The state doesn't export rice to China, but they would certainly like to. Andrew Grobmyer, executive director of the Agricultural Council of Arkansas, said the threat of a tit-for-tat battle over imports and exports is impacting the state's attempts to break into China's massive rice market.
"We had gotten a lot of progress through this administration and felt like we were on the brink of accessing that market," said Grobmyer. "This kind of jeopardizes where that may take shape."
Row-crop farmers are growing anxious about what tariffs could come next, if they are implemented at all. Rich Hillman, a soybean and rice farmer from Carlisle and vice president of the Arkansas Farm Bureau, said while he and the Farm Bureau support the Trump administration's efforts to put global trade on a more even playing field, he said the way its being done isn't the way it should happen.
"We know in the past that China has taken advantage of the American farmer," said Hillman. "At the same time we cannot withstand a long term trade war. That will be devastating for the United States and it will be devastating for the Arkansas economy."