Knives out for US pork in tariffs war

  • The US pork industry is squealing after its two biggest foreign markets imposed steep tariffs in retaliation for steel and aluminium duties from the Trump administration.
  • Mexico last week declared a 20% duty on imports of pork from the US, up from zero. China in Apr 18 raised tariff rates on US pork from 12% to 37%, putting the meat at a disadvantage in a global market.
  • The duties target an industry with a strong presence in states that voted for President Donald Trump, including Iowa, Indiana and North Carolina.
  • Before Mexico’s announcement, the government estimated the US would export nearly a quarter of its 12.2mn tonnes of pork production in 2018. Mexico has been the industry’s top customer by volume, taking delivery of more than 800,000 tonnes of hams and other cuts worth USD1.5bn in 2017. China bought almost half a million tonnes, according to the US Meat Export Federation. Canada, whose prime minister Justin Trudeau received a blast of criticism from Mr Trump, is the US’s fourth-largest pork export market.
  • The new tariffs come as fortunes darken for the US pork industry. Too many pigs are heading for slaughter after four years of herd expansion. Producers will lose USD11 per head in 2018 and USD14 per head in 2019, forecast Chris Hurt, agricultural economist at Purdue University in Indiana.
  • The White House has tried to boost agricultural exports, a rare industry where the country has a trade surplus. Argentina recently agreed to allow US pork imports for the first time since 1992. The new tariffs could knock back those efforts.

External Link: https://www.ft.com/content/d14decea-6b5e-11e8-b6eb-4acfcfb08c11

11-Jun-2018


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