Dairy could feel brunt of tariffs

By Justin Walker

U.S. dairy would be negatively impacted from proposed Chinese tariffs, according to a recent study.

China proposed 25 percent tariffs on a number of U.S. dairy products, which could cause issues for dairy farmers across the country, Dr. Luis Rivera, director of the Center for North American Studies at Texas A&M University and AgriLife Extension economist, said.

Rivera’s study looked into three possible scenarios concerning the Chinese tariffs, as well as potential tariffs from Mexico, and the effects on the dairy market.

The potential scenarios include:

Using elasticities to measure the potential losses of the China dairy export market

A 42 percent loss of the China dairy export market as seen in exports data for July and August

Total elimination of the China export market

“As a 25 percent tariff was imposed, there was a reduction in imports of U.S. dairy products of 42 percent in July and August compared to last year,” Rivera said. “That’s not just economics, but also politics at play here. That makes sense in China since it’s a centralized decision. The interesting part of this is a combination of economics and politics.”

The study also surveyed what would happen if the Chinese market for U.S. dairy was completely eliminated.

“We found that more than 16,000 jobs would be eliminated, and it would cost up to $3.4 billion in annual losses,” he said. “That’s a big hit with regards to money turning over in our own national economy, so the implications of these potential scenarios could carry some big weight.”

Regardless of economics or politics, Rivera said, everyone involved in dairy will be impacted.

“We won’t be sending as much product overseas, not selling as much and still losing that important market,” he said.

1 comment:

  1. What about the removal of the 230% Tariffs that Canada was imposing on our Agricultural commodities? This is a battle in the middle of a trade war that we have been losing for decades with China. In a year, I bet that our strong position results in lowered or no tariffs within a year or two. It has really been sad that we have been taken advantage of for years on trade policies. We finally have someone in charge that recognized it and has the guts to fight back.


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