Question

You are a pork producer in Indiana. We now have a tariff on imported steel from China. In turn, China has a tariff on imported pork from the U. S.

In one page, doubled spaced; 12 Font tell me how does this affect you; the pork exporter in Mexico.

Answer 1

Impact of China tarrifs on Mexican pig farmers

If U.S. pork products are levied with a 25% tax, Chinese customers will be less likely to buy them, resulting in lower profits for U.S. farmers. That loss would force pig producers to either look for new markets or produce less pork.

While some meats could be sold to other countries, but it’s unlikely that they’d entirely make up for what is presently sold to China, which is ultimately bad news for pork exporters in Mexico and as well as consumers.

China is a valuable market for those products because of the price that the country pays for them and the relative lack of other markets for those products. More than $1 billion in U.S. pork was shipped to China last year making it the third-largest value market for U.S. pork products.

Hence losing business abroad could further put the squeeze on pig farmers. That, in turn, could at some point lead to “marginally higher” prices on pork products commonly sold stateside, such as ham and bacon

Although the prices remain steady at short term but in due course we could see a little higher pork prices in US as Mexican producers adjust down the production in response to those low variety prices.

Pig farmers\producers due to low prices of pork stand to lose $4 or more per animal as a result of these tariffs.

Historically, trading partners target U.S. farm commodities because they know it sends a powerful political message, it’s clear from past actions and current data Mexican & US farmers will be among the first to suffer retaliation from these tariff increases.

Trade wars or talks of trade wars and retaliation are not healthy for Mexican pork producers.

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