Mexico, the top importer of U.S. pork, announced retaliatory 10-percent tariffs on Tuesday, rising to 20 percent in a month’s time, that would effectively shut the door to the American meat. One of every five pounds of pork produced in the U.S. is sold to a foreign buyer.
“While producers are trying to be good soldiers, we’re taking on water fast,” said Ohio farmer Jim Heimerl, president of the National Pork Producers Council. “The president said he would not abandon farmers. We take him at his word.”
China, the third-largest market for U.S. pork, announced retaliatory duties of 25 percent on U.S. pork in late March; like Mexico, China announced the tariffs in response to U.S. duties on steel and aluminum imports. The potential loss of exports would add to financial woes facing hog producers in the second half of this year and in 2019, says Purdue economist Chris Hurt. U.S. meat production is expanding rapidly and driving down livestock prices.
“Losses of more than $25 a head are estimated for the last quarter of 2018 and the first quarter of 2019,” wrote Hurt at the blog farmdoc Daily. “The industry is…in a vulnerable position it these trade differences should reduce pork exports.” Canada and the EU have also threatened retaliatory tariffs on U.S. pork. Mexico, China and Canada account for half of pork exports.
Traditionally supporters of world trade, farmers voted for President Trump in landslide proportions because of his platform of tax reform, regulatory relief and support for corn ethanol. U.S. farm groups hoped to change Trump’s mind on withdrawal from the Trans-Pacific Partnership trade pact and from NAFTA. They want to expand access to foreign markets rather than encounter disruptions in exports. “These trade disputes have to end now,” said a farm group spokesman.
“We appreciate the variety of interests and issues the Trump administration is balancing in its trade negotiations with Mexico, China and other countries,” said Heimerl. “The toll on rural America from escalating trade disputes with critically important trade partners is mounting…A 20 percent tariff eliminates our ability to compete effectively in Mexico. This is devastating for my family and pork-producing families across the United States.”
Mexico said a tariff of 10 percent would take effect immediately on U.S. pork shoulders and legs, which are the lion’s share of imported product, and rise to 20 percent on July 5. Mexico also acted against U.S. cheese, apples and whiskey as well as steel and aluminum. Meat industry officials said Mexico could replace U.S. pork with imports from Canada or the EU, reported Reuters.
“As our largest export market, trade with Mexico is critical to U.S. apple growers,” said the trade group U.S. Apple Association. “A 20 percent duty on apple exports will not only hurt growers’ bottom lines, but could have harmful impacts on rural economies.”
During inconclusive meetings in Beijing, Chinese officials said last weekend the nation would buy $70 billion in U.S. agricultural, energy and manufactured products in a year to resolve friction between the nations by reducing its trade surplus. Trump and other administration officials were to discuss the offer on Tuesday, reported Reuters. China reportedly said the offer would be taken off the table if the United States proceeded with tariffs against Beijing.