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Ag groups react as tariffs take effect
The US implemented tariffs on $34 billion in Chinese goods just after midnight. China retaliated immediately by placing tariffs on US goods.
China’s Commerce Ministry says the US has started the biggest trade war in economic history and that it will jeopardize the global market.
President Trump has threatened to impose additional tariffs on up to $500 billion in products if China continues to retaliate.
The director of communications with the National Pork Producers Council says the tariffs will add to the financial pain farmers are already facing.
Dave Warner says pork producers have already been hit hard by Chinese tariffs.
“Tariffs on US pork going to China now top 60 percent,” he says. “China already has a 12 percent tariff on US pork, then they added a retaliatory tariffs of 25 percent on April 2, and now today another 25 percent.”
Audio: Dave Warner, National Pork Producers Council
He tells Brownfield the NPPC understands that the administration is addressing China’s unfair trading practices. But, he says farmers need relief from trade disruptions caused by tariffs.
“Something needs to happen soon whether that’s ending the trade disputes or some kind of mitigation for all of US agriculture,” he says.
Warner says pork producers could have weathered the Chinese tariffs if it weren’t for a recent hike in tariffs from Mexico. He says 40 percent of exports go to those two countries.
The Iowa Soybean Association (ISA) is urging U.S. and Chinese officials to “get back to the table” and try to resolve issues that have led to the developing trade war between the two countries.
“It’s not good for us. It’s not good for them,” says ISA president Bill Shipley of Nodaway. “Nobody wins, especially when China is using food as a weapon in a trade war. That’s not a good thing, in my opinion. That’s taking food away from their own people.”
Audio: Bill Shipley, Iowa Soybean Association
Shipley says they’re disappointed the trade dispute has reached this point. But he says ISA is still supportive of President Trump’s efforts to rectify trade issues with China.
“The Chinese, since 2009, have dropped us from being their primary supplier of soybeans, at 51 percent, down to 37 percent now. That would help the trade deficit if they would get it back up to us being their primary supplier.”
Iowa State University ag economist Chad Hart estimates Iowa soybean farmers stand to lose up to 624 million dollars because of higher tariffs implemented by China.
Soybean basis
Brazil +$3.25 PNW +$1.70 Gulf +$1.80
Brasil beans are worth more than a $1.00/bu more than US landed China. China will need to import US beans but Black Sea region is already ramping up production of soy.
Wheat
Chinese imports will drop to nil. Black Sea wheat now accounts for 37% of the world trade. Canadian wheat will be moving in to replace hipro wheat. Once mills go to it they are unlikely to go back.