Agriculture Braces for China Tariffs
(Updated – April 4, 2018) The escalating trade tensions between Beijing and Washington have pulled America’s farmers and agricultural exporters into the melee.
In a one-two punch delivered Sunday and Wednesday, China announced a series of tariffs that will impact tens of billions of dollars in American goods.
On Sunday, China announced tariffs of as much as 25 percent on American pork and as much as 15 percent on fruit and 120 types of other commodities. This first round totaled about $3 billion.
The bigger hits came Wednesday when Beijing said it would impose 25 percent duties on soybeans, wheat, corn, cotton, sorghum, tobacco and beef as part of $50 billion in tariffs.
China is the world’s biggest importer of soybeans. It bought about $14 billion worth from the U.S. in 2017. The Asian nation also accounts for about 80 percent of American sorghum exports, or about $960 million.
China last year represented a $460 million market for U.S. fruit and tree nuts. It was the second-biggest buyer of American cotton—a $5.8 billion export market in 2017—and the No. 1 customer in the $1.2 billion market for pork byproducts like pig’s feet and tails.
The tariffs have arrived as part of a series of such moves between the U.S. and China. The tariffs that China announced Sunday were retaliation for the 25 percent steel and 10 percent aluminum tariffs imposed by the Trump administration in March. The Association will host a roundtable on the steel tariffs at the Supply Summit in two weeks.
The Trump administration has since proposed $50 billion in levies on a slew of Chinese goods from gas turbines to lithium batteries. This new rounds of tariffs does not take effect immediately. The U.S. will take comment from industry for 30 days, then have 180 days to decide whether to actually levy tariffs.
China also has delayed enforcing the tariffs. The countries have begun preliminary talks to reach a resolution.
Lawmakers from agricultural states are worried about the effect of tariffs on their producers, as are farmers.
“Farmers and ranchers are, by necessity, patient and optimistic,” said American Farm Bureau Federation president Zippy Duvall. “We know markets ebb and flow. But China’s threatened retaliation against last night’s U.S. tariff proposal is testing both the patience and optimism of families who are facingthe worst agricultural economy in 16 years. This has to stop.
“Growing trade disputes have placed farmers and ranchers in a precarious position. We have bills to pay and debts we must settle, and cannot afford to lose any market, much less one as important as China’s. We urge the United States and China to return to negotiations and produce an agreement that serves the interests of the world’s two largest economies.”
Sources: Wall Street Journal, Bloomberg