China’s tariffs on U.S. goods took effect Monday and include pork imports, which could create significant financial trouble for Iowa producers. National Pork Producers Council spokesman Jim Monroe says last year China imported more than $1 billion worth of American pork.
“China is a very important market for us,” Monroe says. “It’s the number-one pork-consuming nation in the world and our industry’s growth is coming from exports.” China’s tariffs are in response to the Trump administration imposing higher taxes on steel and aluminum. Iowa State University economist Wendong Zhang says pork had been slated for a possible second round of tariffs, but in the end, China did just one wave of 128 products — including pork.
“I think what the Chinese government wants to do is send a clear message that they are willing to fight,” Zhang says, “and they’re willing to target agricultural products.” Zhang says the U.S. ag sector doesn’t have the political clout in China that it has here to push for exceptions or reductions to the tariffs. China is also upping its taxes on a long list of products, including wine, nuts and fruit, to as much as 25 percent.
Financial analyst Russell Barton with UrnerBarry says the new pork tariffs announced by China add up quickly. He says existing import duties and value-added tax were 25% and the new duty added to that equals 50%. “That’s significant. That probably prohibits quite a bit of trade,” he says. But Barton says U.S. pork producers might not see much of a difference in sales to China, with or without the new tariffs.
He says China is not necessarily relying on U.S. pork because their domestic supplies have grown and imports were likely to drop a bit regardless of the tarriffs. Barton says China relies on a lot of pork, but China accounted for only about seven percent of U.S. pork exports, totaling about one-point-five percent of the U.S. pork supply.
And, he says the European Union sells China more than double what U.S. does. Barton says the U.S. has seen slow expansion in other developing markets, and he’s encouraged by the recent trade agreement with South Korea. Barton says Mexico and Japan continue to be solid markets for U-S pork.
(Amy Mayer, Iowa Public Radio and the Brownfield Network both contributed to this story)