Mexican retaliatory tariffs on U.S. pork are so severe that the U.S. pork industry could lose the market altogether if the measures continue, Iowa Pork Producers Association board member Mark Meirick told a House panel Tuesday.
Citing Iowa State University economist Dermot Hayes in written testimony for a hearing of the House Small Business Subcommittee on Rural Development, Agriculture, Trade, and Entrepreneurship, Meirick said Mexican tariffs on U.S. pork in retaliation for U.S. Section 232 tariffs on steel and aluminum have cost U.S. pork producers $12 per animal, translating to $1.5 billion yearly losses across the industry.
Mexico imposed 10 percent tariffs on U.S. pork on June 5, which rose to 20 percent a month later, Meirick noted.
The U.S. pork industry also has the “dubious distinction” of being on three total retaliation lists, as China retaliated in response to 232 and Section 301 tariffs, in addition to Mexican retaliation against Section 232 tariffs, he said. Mexico is U.S. pork’s largest volume market and China was the No. 3 volume market in 2018.
“As the world’s most competitive producer of pork, the United States was anticipating increases in access to Japan and Vietnam under the Trans-Pacific Partnership (TPP) and, under existing U.S. free trade agreements, was counting on shipping more pork to Australia, Canada, Central America, Colombia, Mexico, Peru and South Korea,” Meirick wrote.
But now, “restricted market access from ongoing trade disputes is making it increasingly difficult for U.S. pork producers to respond to uncertain export conditions,” he wrote.
Due to revenue losses brought by retaliatory tariffs, Tama County, Iowa farmer Rebecca Dostal had to refinance her operating loan at the end of 2018, using equipment and possessions as collateral, she told the subcommittee.
“Luckily, we are diversified, so we can make up our crop losses in other areas like cattle and hogs, but when it is that dramatic, it makes things difficult,” she said in written testimony. “It will stop us from purchasing equipment upgrades, expanding our herds or acquiring more land.”
“While we appreciate the assistance, we would much rather be paid a fair price by the market, rather than be paid restitution by the government for the trade war,” she wrote.
Meirick, Dostal and Pennsylvania Farm Bureau Board Director Glenn Stoltzfus expressed optimism that the U.S.-Mexico-Canada Agreement (USMCA) will benefit U.S. agriculture trade.
Stoltzfus said the Trump administration upheld several farm groups’ request that it “do no harm” during USMCA talks.
“In our view, the administration has succeeded in ‘doing no harm,’ and done one better,” he said in written testimony. “Nearly all agricultural exports remain subject to zero tariffs, significant and historical strides for the dairy industry have been made with Canada, and many other commodities such as poultry and eggs have gained increased Canadian market access. Given these advancements, we urge Congress to finalize USMCA’s passage.”
He repeated a message he delivered to a House Ways and Means subcommittee last week that the Trump administration should renegotiate USMCA to add a stronger labor enforcement mechanism.
“We need to get back to the negotiating table,” he said in written testimony.