Hidden cost of China trade war: polluted drinking water in rural America

Trade does not occur in a vacuum. When the United States implements a trade action against China, China responds in kind. Not only is this logical to expect within the universe of international trade, but it also has been clearly telegraphed by Chinese state media for months.

If we impose $50 billion in tariffs on Chinese technology exports, they impose $50 billion in tariffs on U.S. soybeans and exports from other key industries.

{mosads}This kind of “tit-for-tat” trade escalation is what leads to full-blown trade wars. As the U.S. has imposed or moved to impose tariffs on not only China, but also allies like the E.U., Canada, and Mexico under the guise of national security, we are marching quickly towards a perilous economic situation. Trade wars hurt consumers, they hurt manufacturers, and they hurt relations between countries.

But the list of the aggrieved does not end there.

The ramifications of a trade war will ripple throughout the country, affecting countless aspects of the U.S. economy in ways that we are not yet talking about. One of those facets is your water bill.

My colleagues at the Northeast-Midwest Institute and I recently released a study funded by the Walton Family Foundation detailing the growing levels of nitrate pollution in water sources. These nitrates have to be removed by water utilities to keep drinking water safe, and this removal comes at a cost. That cost is passed onto you, the taxpayer, in your utility bill. Not only is it expensive to remove nitrate pollution from water, but it also requires a significant capital expense to build the necessary treatment facility.

This means small communities will have to take on millions of dollars in new expenses so that their residents can pay more to simply have safe drinking water.

According to our study, the main reason these nitrate levels are increasing is agricultural runoff. The nitrate-laden fertilizer used to grow corn is mostly absorbed by the plants, but still leaves a significant amount of nitrates in the soil that ultimately make their way into the water. Many farmers have had success limiting this runoff by cycling soybeans into their usual corn crops, as soybeans help absorb the nitrates. This helps both maintain corn as one of the pillars of the U.S. economy and bolster soybeans as the largest U.S. agricultural export.

China just so happens to be the main buyer of those soybeans. By essentially cutting off the main importer of U.S. soybeans, these tariffs will remove a major incentive to grow the crop. While soybeans can be sold elsewhere to countries aside from China as a temporary measure, this becomes harder as more countries look to impose retaliatory tariffs on U.S. soybeans, like Mexico. Also, as other countries like Brazil and Argentina ramp up their capacity to produce more soybeans, the U.S. runs the risk of being displaced in the global market the longer a trade war with China lasts.

Furthermore, the caustic nature of the administration’s trade rhetoric forces more instability on farmers trying to plan their crops, exacerbating the problem. Ultimately, growing U.S. trade hostilities jeopardize valuable conservation efforts by crippling the agriculture sector.

As the price of U.S. soybeans plummets, it makes less sense for farmers to grow them. Subsequently, the nitrate pollution in source water will only continue to escalate. As the problem grows worse, so too will the cost of your utility bill.

Our trade relations need to normalize, and it needs to happen soon. Otherwise, American farmers, American consumers, and the American environment will continue to suffer long-term harm from such myopic trade policies.

Eric Heath is senior policy counsel for the Mississippi River Basin Program at the Northeast-Midwest Institute.