How did the USDA determine trade damage estimate calculations?

U.S. Secretary of Agriculture Sonny Perdue today released a detailed accounting of how the U.S. Department of Agriculture (USDA) calculated estimated damage from trade disruptions. USDA’s Office of the Chief Economist developed an estimate of gross trade damages for commodities with assessed retaliatory tariffs by Canada, China, the European Union, Mexico, and Turkey to set commodity payment rates and purchase levels in the trade mitigation package announced by USDA. USDA employed the same approach often used in adjudicating World Trade Organization trade dispute cases. MFP example 1: Sorghum Step 1: In 2017, China imported $956 million of sorghum from the United States. Step 2: With additional 25% tariff, China is estimated to import $642 million from the United States. Step 3: Estimated gross trade damage = $642 million - $956 million = -$314 million Initial MFP rate = $314 million/364 million bushels = $0.86/bu. MFP example 2: Corn Step 1: In 2017, China and EU combined imported $309 million of corn from the United States. Step 2: With additional 25% tariff from both countries, the combined imports from the United States is estimated to be $117 million. Step 3: Estimated gross trade damage = $117 million - $309 million = -$192 million Initial MFP rate = $192 million/14.6 billion bushels = $0.01/bu.