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This was as predictable as
, but it’s worth discussing anyway. Yesterday, the Chinese government announced plans to impose tariffs on 128 U.S. products, including pork and some fruits, in response to President Trump’s tariffs on some Chinese goods.
- As WaPo notes: “If U.S. goods become more expensive in China, Chinese buyers could opt to purchase products from Europe, South America or elsewhere, though White House officials have routinely discounted the likelihood of this. Beijing’s move could force Trump to decide whether to follow through on expansive trade restrictions he had hoped would crack down on China even if Beijing is now threatening to harm U.S. companies that rely on Asian markets for buyers.”
- These tariffs are retaliation for the tariffs Trump announced last month on steel and aluminum. Future tariffs, which Trump is contemplating, will almost certainly mean more retaliation.
- “China exported $505 billion in goods to the U.S., and U.S. companies exported $135 billion in goods to China in 2017. Trump says the difference between these two numbers is too large and should be eliminated or at least greatly diminished. His precise approach with Beijing is hard to pinpoint because he has occasionally praised Chinese leader Xi Jinping, while also suggesting that Xi’s administration will not offer concessions that he believes are necessary. A number of U.S. agriculture firms have warned they could be caught in the middle of a trade war, particularly if Trump follows through on threats against China and Mexico. The National Pork Producers Council said in late March that its members exported $1.1 billion in pork to China last year, making it the third-largest market.”
- In a few moments of Googling this morning, I couldn’t find any hard numbers on how much North Carolina pork producers export to China (it didn’t help that the N.C. Pork Council’s website appeared to be down), but I did find this from the U.S. Census Bureau: Swine meat is North Carolina’s twelfth-largest export, accounting for nearly $300 million in 2017, about 1 percent of the state’s total exports. China is the state’s third-biggest recipient of exported goods, accounting for more than $2.3 billion.
- WaPo: “Trump’s trade approach has been inconsistent, making it difficult for allies and foreign leaders to know what he plans to do. Trump has said his trade threats are meant as a way of negotiating. On Sunday–in Twitter posts–he threatened to withdraw from the North American Free Trade Agreement if Mexico doesn’t do more to stop immigrants from entering the United States.”
WHAT IT MEANS: I don’t know whether N.C. hog farmers will be dinged by the Chinese tariffs. After all, Murphy-Brown LLC, the largest pork producer in the state (and the world), is a subsidiary of a Chinese conglomerate. And it’s entirely possible that the price hikes that the Chinese tariffs cause won’t be enough to cause the Chinese to begin sourcing their pork from elsewhere. I don’t know enough about the world’s agriculture markets to have any insight on that. But I do know that trade wars have no winners, and this tit-for-tat, should it continue, will eventually catch up to us in some form or another.
