Throughout the country, U.S. agricultural exporters, including soybean and pork producers, have taken major hits in their economic numbers as a result of the tariff war with China.
Now, The Trump Administration will spend $16 billion to help farmers hurt by the US-China trade war, Agriculture Secretary Sonny Perdue announced yesterday.
The fear among farmers, importers and consumers in Arizona is that Chinese tariffs placed on their goods will keep them out of the Chinese market for a long time.
“What’s going to end up happening is you end up having an impact on those businesses that import,” said economist Jim Rounds. “The tariffs will end up passing more costs to consumers, so you and I will be paying for those tariffs. In the meantime, people will adjust and businesses will adjust their supplier network from other countries. But this will create a disadvantage with China.”
China struck back at the U.S.’s tariff hike on $200 billion of imported Chinese goods with tariffs on about 5,000 types of American products reaching about $60 billion. Some of the major components of those tariffs are agricultural products including beef, soybeans, and vegetables.
China is Arizona’s third-largest exporter, shipping out goods such as meat products and cotton. According to the Arizona Beef Council, Arizona’s cattle community contributes about $435 million a year to the state’s GDP, and exports about $525 million of its total beef output to places such as China.
“I think it’s all very delicate,” Rounds said. “Trade agreements for us on the border typically mean issues with Mexico. When it comes to China, however, I think most Americans in general, especially in Arizona, feel that China really hasn’t played by the rules when it comes to trade. I think it’s been very difficult for us to swallow the way China has gone about this.”
Pig farmers in the country have faced two separate rounds of 25 percent punitive tariffs from China on their exports last year. The value of pork from the United States has dipped 14 percent so far this year and producers of the commodity are losing about $8 per pig because of the trade dispute.
“I think what you do have is a lot of conversation toward trade, which is very good,” Jaime Chamberlain of J.C. Distributing in Nogales said. “It’s always very good to have these discussions and issues. This will help more people realize where their products come from and how they get their goods and the costs of those goods. I think the American public needs to educate themselves a lot more.”
The scuttlebutt around the farming and import community in Arizona is that hopes are now being turned toward finalizing the United States-Mexico-Canada Agreement (USMCA), or even expanding business with the European Union, which has called for more soybean imports.
“Our efforts should never turn away from Mexico. I think it’s something we need to continue to foster. It behooves us to have a very good relationship with our southern and northern partners,” said Chamberlain. “We should never take our eye off the ball with that. I do believe that the ratification of the USMCA is extremely important for our trade future. That should be the number one thing we should focus on. But with China, the tariffs most certainly need to be addressed.”