With all the news of tariffs between the U.S., Mexico, Canada and China, the industry may be wondering what impacts they create. While no one knows for sure, analysts can make some predictions.
Christine McCracken, Rabobank’s executive director of animal protein, shares perspective based on current data and historical trends.
China
While 10% incremental tariff from China would have limited initial impact, McCracken says the 10% retaliatory tariff in addition to existing 37% tariffs could slow U.S. pork exports. China accounts for 13% of total U.S. pork export trade today.
“China had already become a smaller export market over the past 2 years given larger domestic pork supplies and general weakness in its economy,” McCracken says. “China is also an important market for offal items, with few other destinations taking these items. If the trade becomes uneconomic, these items would likely be rendered at little/no value.”
For comparison, McCracken points out poultry exports to China have also slowed in the past year due to HPAI restrictions. She says the 15% retaliatory tariff on U.S. poultry products is expected to slow export volumes further, while recognizing these tariffs may be waived or absorbed in product values.
“Also worth watching is China’s recent delay in renewing export licenses for several U.S. packing plants,” she adds. “While not a meaningful number today, with several hundred slated for renewal in the coming weeks there could be additional trade challenges.”
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