The ongoing trade dispute between the United States and China is hurting pork producers, according to the National Pork Producers Council, to the tune of $2.2 billion in projected losses this year.
Iowa State University Economist Dermot Hayes projects, based on the drop in hog futures which have fallen by $18 per animal, the trade dispute is translating into real dollar amounts for the almost $20 billion industry.
“While not all of this loss can be attributed to trade with China, it is certainly the main factor,” said Hayes.
Following the institution of import taxes on Chinese steel and aluminum into the United States, the Chinese government put a 25 percent tariff in place on U.S. pork imports. According to the NPPC, one in every four U.S. hogs is exported. Montana ranks 23rd in pork production nationwide, according to U.S. Department of Agriculture statistics.
And while the NPPC is calling for a “swift” resolution to the trade dispute that they say is impacting 110,000 American jobs reliant on pork exports, they also carefully walked the line supporting the administration’s tactics in a statement.
“U.S. pork has invested significantly to ramp production to capitalize on growth opportunities around the world, including China and other markets throughout the Asia-Pacific region,” said Jim Heimerl, president of the NPCC. “We applaud the administration for making the expansion of agriculture exports a cornerstone of the discussions with China. We hope the next round of trade talks with China results in improved market access to a critical export market for U.S. pork and other farm products.”
However, it is uncertain how the next trade talks will advance. Commerce Secretary Wilbur Ross will meet with Chinese Vice-Premier Liu He. Previously Secretary of Treasury Steve Mnuchin and Secretary of Agriculture Sonny Purdue have been involved in negotiations.
Complicating the talks, however, are newly announced tariffs on $50 billion in goods containing “industrially significant technology” and relating to the “Made in China 2025” program, there is no apparent end to the clash. According to a White House statement, the new list of import tariffs will be announced June 15. Previously the administration threatened tariffs on $150 billion in imports. China said it would retaliate and place U.S. beef, soybeans and grains in the crosshairs.
The Tuesday announcement came as a surprise after Mnuchin announced May 19 that the two countries were “putting the trade war on hold” following back and forth negotiations with China. The announcement indicates that the Trump Administration’s cease fire was short lived.
“Free and fair trade is crucial for
Montana, and it benefits our hardworking farmers and ranchers. Where there are unfair trade practices, we should level the playing field with narrowly tailored tariffs, just like we have with Canadian lumber,” said Rep. Greg Gianforte, R-Mont.
Referring to the aluminum and steel tariffs, he added that “…no one wins with broad tariffs and trade wars, particularly Montana agriculture. Foreign markets are critically important to Montana, and we need to keep them open.”
Likewise, Senator Steve Daines, R-Mont., remains concerned about the impacts on Montana agriculture.
“Agriculture is Montana’s number one industry and Senator Daines is concerned about the impact proposed tariffs could have on Montana’s farmers and ranchers,” said a Daines spokesperson. “He is working closely with the Trump Administration to encourage them to open markets to support US agriculture, manufacturers, small businesses, and families and engage in trade deals that benefit Montanans.”
And Senator Jon Tester, D-Mont., called for an end to the trade dispute.
“These tariffs are creating too much uncertainty for Montana family farmers and ranchers—including local pork producers,” said Tester. “We should be working to increase access to exports markets, not fueling trade wars that cause producers to lose money and force families to pay more at the grocery store.”
Responding to a request for comment on the NPPC’s release this week that their industry is taking a beating from the trade war, the USDA backed the administration line.
“China has been engaging in unfair trade practices for decades and President Trump is right to hold them accountable,” said a USDA spokesperson. “American agricultural producers are so successful that their products are in markets all around the world. Unfortunately, that means they are vulnerable to Chinese retaliation. As President Trump has made clear, he will not allow American agriculture to bear the brunt of retaliatory tactics. At the same time, USDA continues to work to expand existing markets and open new ones for American products, including pork, in the global marketplace.”