Iowa would lose about 1,800 jobs if the Trump administration imposes tariffs on $50 billion in goods from China and it retaliates, according to a new study.
Farmers also would see a 6.7 percent hit to their incomes, according to the study, which was commissioned by the Consumer Technology Association and National Retail Federation.
Fears of a trade war rose to new heights last month, as President Trump and the Chinese engaged in escalating threats to impose tariffs on a range of goods.
"We must resolve this trade dispute without resorting to job-killing tariffs and retaliation," the retail federation's president and chief executive Matthew Shay said earlier this week.
Top officials from China and the Trump administration began two days of trade talks Thursday.
The products the Chinese have targeted hit close to home for Iowa, with soybeans one of the products on the list. On Thursday, Bloomberg and other news outlets reported the Chinese already had canceled orders for U.S. soybeans.
The new study says that 134,000 American jobs would be lost, most of them less-skilled workers, if there were tariffs imposed on $50 billion in goods on both sides.
Manufacturing would rise in some sectors but fall in others, the study said, while construction and service positions also would be lost.
The study said that Iowa would lose 1,856 jobs. Illinois would lose 2,302 jobs.
The numbers would go much higher if duties were imposed on an additional $100 billion in goods from China and it responded in kind. The hit to agriculture would more than double if that were the case, the study said.
The Trump administration has threatened tariffs on as much as $150 billion in Chinese goods.
California and Texas would lose the most jobs, the study said, or about 30,000 between them under the $50 billion scenario.
The threat of trade conflict has worried the agriculture industry, as well as Midwest lawmakers who have tried to make sure the White House knows the potential impact in rural America.
Earlier this week, in a visit to a Clinton business, U.S. Sen. Chuck Grassley, R-Iowa, said Trump is engaged in "brinksmanship."
He praised the effort at improving the country's trade posture. Still, he acknowledged the risks.
"If you come to the brink and you don't go over, I think we're going to be winners. If we go over, then you know what's going to happen to agriculture. And that's really fearful," Grassley said.
Reuters reported Thursday evening that two people familiar with the talks said the U.S. demanded that China cut its trade surplus with the U.S. by $200 billion, end subsidies for advanced technologies and reduce import tariffs.
The U.S. had a $375 billion trade gap with China in 2017, up $28 billion from the year before.
China's Xinhua news agency described the talks as "constructive, candid and efficient" but said disagreements remain “relatively big," Reuters reported.