Friday, June 22, 2018

Pork and soybean producers brace for Chinese tariffs

Economists warn that the Chinese response to President Trump's tariffs will help other countries and hurt American farmers, Jim Spencer reports for the Star Tribune in Minneapolis.

Soybeans will likely take a big hit if China proceeds with the 25 percent tariffs it has threatened. Purdue University agricultural economist Wallace Tyner said American soy growers could face a loss of 69 percent of Chinese sales as American soy becomes more expensive than Brazilian soy, Spencer reports. Some of that soy could be sold to other nations, but if the tariffs stay in effect for a while, overall American soy exports could shrink by 29 percent, Tyner said.

American pork producers are already feeling the pain from the first round of retaliatory Chinese tariffs, and are bracing themselves for a second round next month. "China implemented a 25 percent duty on most U.S. pork items on April 2, and a 15 percent tariff on a range of fruits and nuts, in response to U.S. tariffs on Chinese steel and aluminum products," Dominique Patton and Tom Polansek report for Reuters. "Last week it included both categories in a second round of tariffs to be imposed on July 6. No other products have been listed twice."

Total pork tariffs to China are at 71 percent right now, not including value added tax, and will reach 88 percent next month according to an industry expert's calculation, Reuters reports.

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