In a 96-second video posted Monday on social media, the U.S. cattle industry predicted it would be shut out of the Chinese market and lose an estimated $70 million in beef sales this year due to retaliatory tariffs. “Mr. President, your trade war with China is hurting American cattle producers. Please end it,” said the video from the National Cattlemen’s Beef Association (NCBA).
The milk industry said the financial heath of dairy farms could be damaged by retaliatory tariffs on U.S. dairy products imposed by China and Mexico. And Purdue economist Chris Hurt said U.S. pork exports plunged by 25 percent during June in the face of Mexican and Chinese tariffs, adding to an impending flood of red ink for hog farmers created by rising pork production and weakening slaughter prices. Mexico is the top market for U.S. pork and dairy exports; China is No. 2 in both sectors.
Exports are a major moneymaker for livestock and dairy producers. The recent imposition of tariffs interrupted what had been a strong sales year. Beef exports were a record $722 million in May, said the U.S. Meat Export Federation. “May exports to China were the largest [834 tonnes] since the market opened in June of last year.” The USMEF said that pork exports, at $562.5 million worldwide in May, were down by 3.5 percent from the record set in April.
“The president is standing up to protect our national interests, including holding China accountable for unfair trade practices and theft of intellectual property,” said a USDA spokesman, who repeated an administration promise to shield the agricultural sector from retaliation for U.S.-imposed tariffs. “It would be unwise to unveil the playbook while other nations are watching, but if conditions warrant, USDA will quickly begin fulfilling that promise to support producers who become casualties of these disputes.”
A year ago, the Trump administration celebrated the reopening of the Chinese market to U.S. beef. Now the industry faces tariffs totaling 37 percent, which “will stop our access into China,” said the NCBA’s Colin Woodall. “It’s going to have an effect on our bottom line, no doubt about it.”
Mexico, Canada, and the European Union announced duties on U.S. products, including food and ag exports, in response to U.S. tariffs on imported steel and aluminum. China has imposed two rounds of tariffs affecting food and ag exports, one in response to the steel and aluminum tariffs and the latest, on July 6, because of tariffs on its high-tech products. China, Canada, Mexico, and the EU are the four largest markets for U.S. ag exports.
“The one-two punch of Mexico’s retaliatory tariffs on cheeses and China’s subsequent tariff announcement sent U.S. dairy futures plummeting last month,” said the National Milk Producers Federation. The dairy industry managed to persuade Mexico to phase in its tariffs, “but the impact is still a significant setback for U.S. dairy farmers. … NMPF believes it is essential to focus U.S.-Mexico trade discussions on restoring duty-free trade, which is vital to achieving an updated NAFTA.”
One-fifth of U.S. pork is exported — a success story for an industry that can deliver meat at competitive prices to overseas customers, said Purdue’s Hurt at the farmdoc Daily blog. “Our success in growing exports to 22 percent of production means that pork became a target of both China and Mexico. China has also placed tariffs on U.S. beef and poultry, which may reduce U.S. exports of these competitive meats.” Hurt estimated that farmers, on average, will lose money on slaughter hogs for the rest of this year. “In 2019, prices are expected to be below [production] costs for much of the year.”
Tennessee hog farmer Jimmy Tosh told the Associated Press that he will vote for a Democrat for the Senate in November in part because of the Trump tariffs. “This tariff situation has got me very, very concerned,” said Tosh. The AP said, “Similar concerns are roiling high-profile Senate contests in Missouri, Indiana, Pennsylvania, and North Dakota, and forcing GOP candidates to answer for the trade policies of a Republican president they have backed on almost every other major issue.”
China’s Commerce Ministry said it will use revenue from its tariffs on U.S. goods to help companies that face higher costs because of the duties, reported AgriCensus, which is based in London. “This statement is the first sign that Beijing will subsidize companies from the imposition of the soybean tax amid reports that U.S. President Trump will do likewise with American farmers.”
“China is encouraging its grain traders to look to Eurasia to diversify sources of major agricultural products as the country trades tariffs with the United States,” said the South China Morning Post, describing an offer by a Chinese agency to support infrastructure projects in Gansu Province in north-central China, part of the ancient Silk Road trading route.