July 18, 2018
US pork producers fear huge losses over 62% China tariff
Due to escalating trade disputes between the US and other countries, American pork producers face large financial losses, with some of them possibly going out of business, said the National Pork Producers Council (NPPC).
The NPPC pointed out that US pork producers now have to contend with punitive tariffs of 62% on exports to China, a market that represented 17% of total US exports by value in 2017.
China announced a new 25% tariff in response to US action under Section 301 of the Trade Act of 1974. This is on top of the 25% punitive duty levied by China in early April in response to US action under Section 232 of The Trade Expansion Act of 1962, the NPPC said.
US pork already had a 12% tariff on exports to China. (The country also has a 13% value-added tax on most agricultural imports.)
Combined with Mexico, which also placed a punitive tariff on US pork (10% from June 5 until July 5, when it rose to 20%), 40% of total American pork exports now are under retaliatory tariffs, threatening the livelihoods of thousands of US pig farmers, according to the NPPC.
It cited Iowa State University economists' estimation that from early March, when rumors of China's initial retaliatory tariff were circulating, through May producers lost $18 per hog, or more than $2 billion on an annualised basis.
"We now face large financial losses and contraction because of escalating trade disputes. That means less income for pork producers and, ultimately, some of them going out of business", said Jim Heimerl, NPPC president and a hog farmer from Johnstown, Ohio.