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How the Trade War Will Affect Pollution in the US

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Agriculture accounted for 9% of total greenhouse gas emissions in 2017. China has already put a 90% tariff on US agricultural imports in July 2018, substantially reducing US agricultural exports to China (ASHR). Since the United States (SPY) is a net agriculture exporter, a prolonged trade war could actually reduce greenhouse gas pollution from the US agriculture sector as trade slows. However, the overall drop in pollution won’t be substantial enough to offset the rises in pollution from other sectors.

The residential and commercial sector might see a marginal drop in greenhouse gas emissions if the economy slows down.

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To sum it up

The trade war may have a catastrophic impact on pollution caused by US sectors. The pollution from the transportation sector (IYT) may rise on the back of subdued oil prices if the trade war continues. Moreover, we may see a possible slowdown in the quest for energy efficiency among carmakers due to slowing exports and technology transfer friction.

With solar (TAN) panels getting more expensive, the pace of renewable energy adoption in the United States could see a slowdown. Moreover, cheaper fossil fuels may hamper the country’s willingness to switch to cleaner energy sources.

If President Donald Trump manages to bring manufacturing (XLI) back to the United States, it will add more pollution.

International impact

In a divided world, building a consensus on environment deals will be even more difficult as countries continue to focus on domestic economics rather than global sustainability.

Overall, the trade war may make our planet more polluted. Are you ready for it?

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