What is in this article?:
- Trade war possible
- China raising interest rates
- Beware of tariffs
- Currency exchange threatens ag exports
U.S. agriculture should pay careful attention to the value of the U.S. dollar and foreign currency as potential pitfalls could be looming and threatening domestic exports, according to a Texas AgriLife Extension Service economist.
The U.S. dollar has depreciated approximately 15 percent in the last six months compared to many other currencies, making exports less expensive to foreign buyers and consumers, said Dr. Parr Rosson, AgriLife Extension economist and director of the Center for North American Studies at Texas A&M University.
China and Japan, however, have taken action to lower the value of their currencies, making their products less expensive on the world market and raising the cost of U.S. exports to consumers in both countries.
This action creates more competition for U.S. exports from competing countries, Rosson said.
"This makes their products less expensive and makes U.S. products more expensive to consumers in China and Japan. The European Union may adopt a similar policy if the euro continues to strengthen. If this occurs, it could result in an all-out trade war."