China’s Retaliatory Tariffs Could Mean Trouble For Colorado Agriculture
New tariffs on American goods went into effect in China on Monday, April 2, in response to President Trump’s announcement to impose tariffs on steel and aluminum exports. According to the Colorado Springs Gazette, China imposed new tariffs on 128 U.S. products including pork and fruit to make up for the financial losses caused by U.S. tariffs on Chinese steel imports.
The tariffs were first announced in March the day President Trump imposed tariffs of 10% on aluminum products and 25% on steel product imports.
China’s Ministry of Finance said in a statement that China would be placing a 25% tariff on recycled aluminum and pork products and a 15% tariff on steel pipes, nuts, fresh fruits, wine, and ginseng. These tariffs, the Ministry said, are to balance the financial losses caused by the new American tariffs that reportedly violate the rules of the World Trade Organization.
“The threat of these penalties against agriculture would stunt markets here in Colorado for many of our producers,” said Colorado Farm Bureau president Don Shawcroft to The Fence Post.
“Commodity prices, already soft due to oversupply will be pushed ever lower,” Shawcroft said. “These tariffs will hit our producers particularly hard.”
The tariff dispute is only the latest development in an ongoing dispute between the U.S. and China since President Trump declared an investigation into China’s trade practices. According to USA Today, President Trump accused China of stealing American technology and imposed tariffs on Chinese steel and aluminum imports as a means of punishment.
Over 1,600 million tonnes of steel were produced in 2016 alone and the U.S. is the world’s leading steel importing nation.
In fact, compared to the projected net worth of the metalworking fluids market in 2020 at $9.74 billion and the global spending of $5.58 billion on motorsports in 2016, the U.S. alone brings in over $29 billion worth of steel every year.
On the other side of the coin, China produces up to 49% of the world’s exports in steel. Compared to the average of 10,000 sheets of paper used by an office worker every year, the U.S. consumes 97 million tonnes of steel by itself.
It’s for this reason President Trump chose to impose the tariffs on steel rather than another Chinese import.
“It’s going to make us a stronger, much richer nation,” said President Trump in a speech regarding the new tariffs.
However, China’s new tariffs on American goods could mean trouble for Colorado. Colorado exports up to 6% of its agricultural products to China.
Although Mexico and Canada are currently Colorado’s largest sources of exports, financial loss through China could potentially slow the market growth for future American products.
Additionally, the U.S. only recently gained approval to export beef to China and the Colorado Department of Agriculture is worried about the vulnerability of the newly-obtained exportation.
“The impacts are bigger than just those items listed for penalties by China,” said Shawcroft. “Colorado produces a lot of feed for pork and these kinds of secondary markets will also be hit hard.”
“American farmers export more than 20% of their products,” Shawcroft added. “And these tariffs threaten the fragile health of the entire agriculture industry.”
