China’s alfalfa market and imports: Development, trends, and potential impacts of the U.S.-China trade dispute and retaliations

This study examines the development and trends of China’s alfalfa market and imports, identifies key factors for the rapid increase in China’s alfalfa imports, and discusses potential impacts of the U.S.-China trade dispute and retaliations on the alfalfa markets and trade in both nations. China’s rapid transition toward larger-scale commercial dairy production, with enhanced feed and cost management as well as quality and safety control, and its limited resources for high-quality alfalfa production are key factors for the dramatic increase in its alfalfa imports, from 19 601 metric tons in 2008 to 1.38 million metric tons(mmt) in 2018. While the United States dominated China’s alfalfa imports with an average share of 97.01% from 2007 to 2017, the share dropped to 83.76% in 2018 and 63.28% in January 2019 due to the trade dispute and retaliations started in 2018. China will likely remain a large importer of alfalfa because of both its growing demand and the comparative advantages of imported alfalfa in quality and price, but the imports from the United States will be highly affected by the ongoing trade dispute and negotiations. China is also expected to make more efforts to reduce its dependence on U.S. alfalfa through increased investment in domestic alfalfa production and identification of alternative sources of alfalfa and other hay imports.

Status Quo and Improvement of Retaliation in the WTO Dispute Settlement Mechanism

Retaliation is described in the DSU as suspending concessions or other obligations. It applies to circumstances where the losing party fails to bring its measure into compliance with a covered agreement and mutually acceptable compensation cannot be agreed within a reasonable period of time. However, some deficiencies do exist in this system such as impairing the international trade. To solve these problems, mandatory pecuniary compensation should be introduced, especially when developing members are involved.

Self-Control Training Decreased Intensity of Penalty Toward Previous Offender

Previous studies have found that self-control training was effective in improving an individual’s self-control,which plays an important role in inhibiting negative emotions.However,it is unclear whether self-control training can facilitate refraining from retaliation.This study randomly assigned participants(N=55)to a training condi-tion(building self-control by avoiding sweets)or a control condition.Before and after training,participants com-pleted the Transgression-Related Interpersonal Motivations Inventory-18(TRIM-18)and a modified Taylor aggression task once each.Participants in the training condition inflicted more low-intensity penalties on the pre-vious offender compared to control participants.Participants in the training condition reported lower revenge scores after training than before training.These results provide preliminary support that providing people who wish to forgive self-control training might promote forgiveness.

RMB Drops to Its Weakest Point in 11 Years

The trade dispute between China and the United States saw new chal-lenges occurring in August.The United States imple-mented an additional 10-percent tariff on$300 billion worth of Chinese goods which came into effect in September,while China retaliated with fresh tariffs on$75 billion worth of U.S.goods,with tariffs ranging between 5 percent and 10 percent depend-ing on the product.The RMB also sank to 7 yuan against 1 dol-lar,its weakest rate in 11 years.

The carbon border adjustment mechanism is inefficient in addressing carbon leakage and results in unfair welfare losses

The European Commission has proposed a Carbon Border Adjustment Mechanism(CBAM)to reduce carbon leakage and create a level playing field for its domestic products and imported goods.Nevertheless,the effectiveness of the proposal remains unclear,especially when it triggers threats of retaliation from trading partners of the European Union.We apply a Computable General Equilibrium model-Global Trade Analysis Project-to assess the economic and environmental impacts of different CBAM schemes.Here we show that the effectiveness of the CBAM to address carbon leakage risks is rather limited,and the CBAM raises concerns over global welfare costs,Correct to Gross Domestic Product(GDP)losses,and violation of equality principles.Trade retaliation leads to multiplied welfare losses,which would mostly be borne by poor countries.Our results question the carbon leakage reduction effect of a unilateral trade policy and suggest that climate change mitigation still needs to be performed within the framework of international cooperation.

CRISIS FOCUS:Retaliation for Peace

As a response to the U.S. tariff increase on Chinese tire imports, China announced an antidumping and anti-subsidy probe into imports of some U.S. auto products and chicken meat on September 13. (See P.12 for details) This retaliatory measure is not aimed at a trade war with the United States, but to check protectionist inclinations of trade partners and hence create a more stable and predictable environment for international trade, Mei Xinyu, an associate research fellow with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said in an article he wrote for Beijing Review.