Tariffs could take a toll on U.S. pork producers and soybean farmers

Global Business

China’s proposed tariffs on U.S. products would be keenly felt in the Midwest region of the United States. It’s one of the most important agricultural areas of the country. Dan Williams reports.

Local pork and soybean associations say the tariffs would be devastating for the farming industry.

China’s decision to impose retaliatory tariffs on a range of products, including a 25% tariff on U.S. pork, comes as a countermeasure to the proposed tariff increases on Chinese imports by the U.S. But if that threat is carried through, the blow to the U.S. pork industry could be severe.

“Essentially, 149 dollars is what the average marketed hog value is. And 53 dollars of that is essentially for exports. And with China being our Number 2 market, that would really hurt the economy and our U.S. pig farmer,” said Jennifer Tirey of the Illinois Pork Producers Association.

U.S. soybeans were included in the second wave of China tariffs. That market is worth an estimated $14 billion to U.S. farmers.

Watch video: Chinese products you didn’t expect would be hit by U.S. tariffs tariffs

“It is our Number 1 customer. Here in Illinois, we grow more soybeans than any other state. And most of those get exported. So it is our biggest customer by far. China buys more of our soybeans than all of the other countries combined,” said Mark Albertson of the Illinois Soybean Association.

Julian Diaz of the Quinlan School of Business at Loyola University believes the tariffs bring doubt to U.S. agriculture.

“The Chinese market is so important that the effects on American farmers would be significant. Another possible effect of this, that given the size of the China market, American farmers would want to lower their prices which had already been on the decline so that the effects of the tariff would not be perceived as being that intense on the Chinese market. So that would be another negative effect on the producers,” said Diaz.

A number of other industry could also feel the impact. The U.S. auto industry could also be hit by a 25% tariff. The U.S. exported more than 267,000 cars and light trucks to China last year. A tariff on airplanes could impact U.S. air giant Boeing. China is Boeing’s biggest export market. The U.S. state of Kentucky will be concerned by the tariffs on bourbon as well as tobacco.

The tariffs have not yet come into effect. American business groups have urged the two sides to engage in talks and avoid an all out trade war.