The imposition by the United States of tariffs on steel and aluminum imports – for national security reasons – led China to impose a 25 percent duty on pork. Since March 1, when speculation about Chinese retaliation against U.S. pork began, hog futures have dropped by $18 per animal, translating to a $2.2 billion loss on an annualized basis, according to Iowa States University economist Dermot Hayes. While not all of this lost value can be attributed to trade friction with China, it is certainly the main factor.
The market disruption caused by export market uncertainty comes at a time when U.S. pork is expanding production to record levels. Five new pork processing plants have recently opened or will soon begin operations, increasing U.S. pork production capacity by approximately 10 percent from 2015 levels by next year. Exports accounted for more than $53 of the average $149 value of a hog last year and support over 110,000 U.S. jobs. The United States has, on average, been the top global supplier of pork over the last 10 years.
The pork industry is one of the few sectors of the U.S. economy that can immediately reduce the trade imbalance with China, where pork represents approximately 10 percent of the consumer price index. Eliminating or reducing tariffs on frozen and chilled pork and improving access to China would result in an explosion of pork exports, contributing significantly to U.S. economic growth and reducing the trade deficit.
NPPC urges the Trump administration and Congress to be mindful of the impact on pork and other U.S. exports when considering trade actions against China.
- China is the largest producer, consumer and importer of pork in the world.
- Since March 1, when speculation on Chinese retaliation against U.S. pork began, hog futures have dropped $18 per animal.
- In 2017, exports accounted for more than $53 of the average $149 value of a hog.
- Exports support over 110,000 U.S. jobs.