The U.S.-China trade dispute could cut $2.2 billion out of hog farmer revenue this year, said a farm group representing pork producers on Tuesday, shortly before the White House said it would impose tariffs on $50 billion in Chinese products, possibly before the end of June. China’s Ministry of Commerce responded by saying it has the confidence and experience to defend China’s core interests.
Earlier this year, China targeted U.S. agricultural goods for retaliation when the White House first proposed duties on imports of high-technology products made in China. The White House announcement raised the stakes for trade talks slated to begin this weekend in Beijing.
The largest U.S. farm group declined to speculate if farm exports would be affected by the announcement of 25 percent tariffs on $50 billion of imports from China “containing industrially significant technology, including those related to the ‘Made in China 2025’ program.” The White House said it would list the products by June 15 and tariffs would be imposed shortly afterwards.
“We aren’t predicting what might happen. But today’s announcement underlines the crucial importance at arriving at a good, negotiated settlement. We’d rather have talks than more tariffs,” said spokesman William Rodger of the American Farm Bureau Federation.
The National Farmers Union, the second-largest group, supports U.S. action against unfair trade practices by China but “we remain concerned that the administration does not have a plan in place to protect farmers from bearing the brunt of retaliatory tariffs,” said NFU senior vice president Rob Larew. “Family farmers can ill afford such volatility amidst the tough economic conditions they are currently facing.” A USDA spokesman was not immediately available for comment.
In late March, China said it would impose a 25 percent tariff on U.S. pork and 15 percent tariffs on U.S. ethanol, apples and almonds to counter-act U.S. duties on steel and aluminum. More than one-fifth of U.S. pork production is exported annually, with $1 billion worth going to China, the world’s largest pork-consuming nation.
The National Pork Producers Council cited an estimate by economist Dermot Hayes of Iowa State University that the hog futures prices have dropped by $18 per head since March 1, the equivalent of a $2.2 billion annual loss to farmers. “While all this lost value cannot be attributed to trade friction with China, it is certainly the main factor,” said Hayes.
NPPC president Jim Heimerl, an Ohio hog farmer, said the farm group hoped the new round of trade talks “results in improved market access to a critical export market for U.S. pork and other farm products.” Pork “is one of the few sectors of the U.S. economy that can immediately reduce the trade imbalance with China,” he said, if China were to remove “punitive” tariffs on pork.
The Commerce Ministry said on its website that it was not surprised by the change of tone by the White House, reported the Xinhua news agency. The ministry said China has the confidence, capability and experience to defend the interests of the Chinese people and the core interests of the country, according to Xinhua’s translation.