WASHINGTON, D.C., Sept. 26, 2018 – U.S. tariffs on auto imports likely would prompt retaliation from some of American agriculture’s biggest trading partners, leading to catastrophic financial harm to farmers, warned the National Pork Producers Council in comments submitted today to the Senate Committee on Finance.
In its ongoing efforts to realign U.S. trade policy, the Trump administration is considering putting duties on autos and auto parts under the 1962 Trade Expansion Act’s Section 232 for national security reasons.
NPPC reiterated its opposition to U.S. tariffs imposed to date – Section 232 duties on steel and aluminum imports and tariffs on imported goods from China related to that country’s theft of U.S. intellectual property and forced transfers of U.S. technology – and to any new tariffs.
“American agriculture generally and U.S. pork producers specifically have borne the brunt of trade retaliation from some of our top trading partners,” said NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio. “We can’t afford to take another hit. If we do, a lot of farmers could go out of business, and consumers will pay a lot more for food.”
According to an estimate from Iowa State University economists, an initial 25 percent Chinese tariff on U.S. pork was the main cause of hog futures dropping by $18 per pig from March through May, or $2 billion industrywide on an annualized basis. In June, Mexico imposed a 10 percent tariff on U.S. pork, and in July, it increased the duty to 20 percent, and China imposed another 25 percent tariff. (Mexico is the U.S. pork industry’s No. 2 export market; China is No. 3.)
U.S. tariffs on auto imports could affect Canada, Japan, Mexico, South Korea and at least four members of the European Union – Germany, Italy, Sweden and the United Kingdom – as well as countries that supply parts to those nations. All are customers for U.S. pork. Canada, Japan, Mexico and South Korea are four of the U.S. pork industry’s top five export markets.
“Tariff retaliation from any of those countries would be bad for us,” Heimerl said, “but if we get duties from Canada, Japan, Mexico or South Korea – or all of them – U.S. pork and other U.S. farm exports would be dealt a devastating blow.”