China tariff on U.S. pork now tops 60 percent; American pork producers face financial crisis

U.S. pork producers now face punitive tariffs of 62 percent on exports to China, a market that represented 17 percent of total U.S. exports by value in 2017.

China announced a new 25 percent tariff in response to U.S. action under Section 301 of the Trade Act of 1974. That tariff is on top of the 25 percent punitive duty levied by China in early April in response to U.S. action under Section 232 of The Trade Expansion Act of 1962. U.S. pork already had a 12 percent tariff on exports to China. (The country also has a 13 percent value-added tax on most agricultural imports.)

Combined with Mexico, which also placed a punitive tariff on U.S. pork – it was 10 percent from June 5 until yesterday, when it rose to 20 percent – 40 percent of total American pork exports now are under retaliatory tariffs, threatening the livelihoods of thousands of U.S. pig farmers.

Iowa State University economists calculated that from early March, when rumors of China’s initial retaliatory tariff were circulating, through May producers lost $18 per hog, or more than $2 billion on an annualized basis. 

“We now face large financial losses and contraction because of escalating trade disputes. That means less income for pork producers and, ultimately, some of them going out of business,” said Jim Heimerl, president of the National Pork Producers Council and a hog farmer from Johnstown, Ohio.

“America’s pig farmers and their families are patriots who are demonstrating enormous commitment to the greater good of our country as they shoulder a disproportionate share of trade retaliation against the United States,” added Heimerl. “We need these trade disputes to end.”

Tariffs on American products make them less competitive on the international market.