MADISON, WI (SPECTRUM NEWS) — Coronavirus and the precautions that came with it slowed the world economy. International trade has slowed with it.

“Cost of doing trade have also increased a great deal. Not much international air traffic anymore and much less shipping as well,” said Ian Coxhead, an economist at the University of Wisconsin – Madison.

Coxhead said the slow in trade hasn't had a huge impact on Wisconsin so far. He said Wisconsin agriculture relies more on commodity trade, which hasn't been affected near as much as specialized products.

However, two years of trade disputes between the U.S. And partners like China had put international trade in a rocky position going into the pandemic.

“Trade was already down very substantially, and trade with China, which is our third largest trading partner in Wisconsin, was down by about 20 percent in 2018/19,” Coxhead said.

Wisconsin's largest commodity — dairy — has taken a hit during the pandemic because of rapid decline in restaurant and other food service industry orders.

“Trade has been on the back burner the last few months as we've dealt with the Covid pandemic,” said Brody Stapel, a Wisconsin dairy farmer and president of Edge Dairy Farmer Cooperative.

Edge has member farms throughout the midwest and advocates for them on federal policy issues including trade.

Stapel said dairy exports are actually up for 2020 compared to 2019. He is also looking forward to the implementation of a new trade deal between the U.S., Mexico and Canada (the USMCA) at the start of July.

“Looking forward to continuing to build relationships with buyers and sellers on both sides of the border, both the north side and the south side of the country. It's got a lot of really good stuff for dairy,” Stapel said.

Beyond that dairy farmers are seeing a rebound in milk prices from quarantine lows. In mid-April cost of milk was around $10 per hundredweight (cwt). As of June 15 prices were up near $20/cwt. Stapel said price of production for farmers is between $16 to $18/cwt.

“The markets have rebounded significantly, almost unbelievably,” Stapel said.

Prices are projected to level off to about $16/cwt through the rest of 2020 on the Chicago Mercantile Exchange. Dairy prices also were depressed for about five years leading up to 2020, finally rebounding in late 2019 before plummeting again when the pandemic hit.

The rebound in the past month has been a welcome development for dairy farmers.

“It's pretty exciting to see the market rebound like it did and be able to keep a lot of dairymen in business,” Stapel said.

While trade in North America can look forward to the start of the new USMCA, Coxhead worries about the long-term impact of the pandemic on trade in southeast Asia.

The region is rebounding from the pandemic quicker than the U.S.. Coxhead said America's weak public health policy when it comes to coronavirus is apparent in the downward trajectory of new cases. The U.S. Is trending down slower than most countries in East Asia.

“That means that our potential for resuming international trade of a normal kind with the rest of the world is impaired by the disease,” Coxhead said.

Coxhead said in the meantime the countries in that region could turn to each other for commodities they otherwise would have bought from the U.S.

“One of the logical implications, I think, is as they do so — and the United States remains semi out of the picture on trade — that they will reorient at least some of their supply chains within the partnership rather than resuming trade with the U.S.,” Coxhead said.

Stapel said if that were to happen, he would be confident it would be a short-term solution for those countries.

“They might turn to each other in the interim here, but long-term we know that the U.S. Is where the dairy needs come from, and the volume that we can produce is what they need,” Stapel said.

Coxhead said the pandemic isn't the only thing working against U.S. Trade with China. He said continued negative rhetoric between the White House and China could fray the relationship. In addition he said many politicians in the U.S. See bashing China as a tool to attract votes.

“What kind of long-term damage that does we'll have to wait and see,” Coxhead said.

Coxhead said the current attitudes in the country about China when it comes to trade is to see them as an enemy rather than a rival. As an enemy neither side wants to see the other succeed, as a rival they compete in a mutually beneficial way. The way Coxhead sees it, major change from the country's leadership would be the only remedy for the relationship between the two trade giants.

“A different administration or a different membership of the current administration would obviously have the potential for changes in trade policy and a more rational trade policy would be a very good thing for the United States,” Coxhead said.