Proposed Chinese Tariff Increase on U.S. Beef

The trade war with China is heating up, and U.S. beef is primed to be in the middle of the dispute. Overnight, China issued a list of proposed tariff increases on over 100 American products, including beef.

The Chinese actions were in response to the U.S. publishing a list of products imported from China that could be subject to additional tariffs. The back-and-forth tariff threats stemmed from the Office of the U.S. Trade Representative’s (USTR) investigation on China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property. The practices coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises.

President Trump said in March that the United States will impose tariffs on approximately $50 billion worth of Chinese imports (approximately 1,300 items) and take other actions in response to China’s policies, following USTR’s investigation.

Overnight, China took retaliatory action with a list of 106 items of which they intend to propose tariffs. The tariff on American-produced beef is suggested at 25%.

NCBA’s Kent Bacus said, “It’s important to realize that as of today, those tariffs from China have not been implemented. Those are contingent on U.S. tariffs on Chinese goods going into effect. Between now and then there is about a six to eight week period where the USTR is taking public comment and will hold a hearing to make a final determination if they move forward.”

That will determine if China moves forward with its threat.

“It’s very concerning to us to see our trade relationship move this way,” Bacus said. “Keep in mind we just restored access to China in June 2017 after being out of that market for 13 years.”

China is not a large market currently, but it is growing. In the last six months of 2017, the U.S. sold $36 Million of beef to China. Through January this year, $7 Million worth of U.S. beef went to Chinese consumers.

“We are developing supply chains there, and we don’t want to disrupt that. That’s why we’re concerned,” Bacus said. “Any time tariffs are thrown around as leverage, it raises eyebrows. We only export 10-15% of what we produce, but what we export adds $300 per head. That’s very important. We can’t afford to jeopardize the access we have.”

NCBA will continue to monitor the situation, and Bacus said he encourages ranchers to talk to their legislators about the issue.

“We need the administration to understand how this is impacting rural America,” he said.

 

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