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The U.S.-China tit-for-tat tariff entanglement threatens to disrupt some industries more than others.
China in July slapped tariffs on $34 billion of U.S. goods in retaliation for President Donald Trump imposing the same amount of tariffs on Chinese goods imported to the United States. Trump responded with plans for $16 million more, as did China. The latest round is scheduled to go into effect Aug. 23. Overall, Trump has threatened putting tariffs on as much as $200 billion worth of imports.
The Trump administration says its tariffs are in response to China’s unfair trade practices and will help bring down the U.S. trade deficit with China. The two countries’ trade in goods and services is worth about $650 billion each year.
China’s tariffs target hundreds of products. The U.S. Chamber of Commerce, largely relying on U.S. Census Bureau data, and others have analyzed the expected impact of China’s tariffs on U.S. industries. Here are the 10 industries that will be hit hardest and their estimated China export value in 2017.
10. Tobacco: $162 million
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Top export state: North Carolina, $156 million
The tobacco industry relies heavily on China, where there are more smokers than there are U.S. citizens, according to the Laurinburg (North Carolina) Exchange newspaper.
U.S. growers are anxious about losing demand for their product as tariffs make their imports more costly to Chinese consumers, according to the report.
“There is a serious risk that the Chinese customer might not return to U.S. market even if all the tariffs went away,” Graham Boyd, executive vice president of the Tobacco Growers Association of North Carolina, told the Exchange.
9. Forage vegetation: $378 million
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Top export state: Utah, $50 million
Prices for hay, clover, vetches and other “forage vegetation” are falling due to China’s tariffs and other market forces. Farmers are planting fewer acres of alfalfa hay and storing their harvests for prices to pick up, especially if the tariffs end, reports analyst Seth Hoyt in Hay and Forage Market.
8. Dairy: $577 million
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Top export state: Wisconsin, $47 million
China is the third-largest market for American dairy food exports, says the International Dairy Foods Association, adding that exports of whey, a milk byproduct, accounted for $246 million.
China was increasing its U.S. purchases at the beginning of 2018 before the U.S. and China imposed the tariffs, according to Farm Journal’s Milk magazine.
The tariffs hit milk and cream of various fat contents, sweetened milk and cream, yogurt, buttermilk, whey, butter, dairy spreads and various types of cheese.
7. Raw cotton: $772 million
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Top export state: Arizona, $29 million
The United States, the world’s biggest cotton exporter, for at least a decade has cornered the bulk of imports to China, which exports finished cotton goods. As tariffs raise the cost to mills and apparel makers, the price of finished products increase for consumers back in the U.S., said Jarral Neeper, president of Calcot, which markets cotton from California, Arizona, New Mexico and Texas.
“All of a sudden, your $80 Brooks Brothers dress shirt is 150 bucks,” Neeper said.
About 95 percent of the American Pima crop — cotton durable and soft to the touch — is exported every year, and typically China imports about 40 percent of that crop, said Marc Lewkowitz, the president and chief executive of Supima, American Pima promoter and owner of the Supima trademark.
As manufacturers look for cheaper cotton, India’s cotton shipments to China could grow five-fold to 5 million bales in the coming year, according to Reuters.
6. Sorghum: $839 million
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Top export state: Texas, $494 million
China began importing U.S. sorghum in late 2013 as a livestock-feed substitute for pricey domestic corn, Bloomberg News reported. Though sales peaked in 2015, China has remained America’s largest foreign sorghum market by a wide margin.
Though not a primary crop on American farms, sorghum ranks among the world’s largest grains by production and plays a key role in crop rotations in Plains states.
5. Pork: $1.1 billion
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Top export state: Missouri, $87 million
The pork industry supports about 550,000 jobs, in mostly rural America, CBS News reported.
Since 2000, the U.S. has been one of the world’s top five pork exporters, selling one in four hogs raised in the U.S. overseas. China gets about 9 percent of the 5 billion pounds of pork America sends abroad.
4. Aluminum scraps and waste: $1.2 billion
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Top export state: Florida, $75 million
China is the single largest recipient of scrap aluminum exported from U.S. shores, according to a Resource Recycling analysis. Last year, the U.S. sent China nearly 820,000 metric tons of scrap aluminum valued at $1.17 billion. That equaled 54 percent of all U.S. scrap aluminum exports. Much of it was recycled and went into car parts.
3. Seafood: $1.3 billion
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Top export state: Alaska, $474 million
The North Pacific fishing industry, which harvests off Alaska, exported more than $750 million worth of products to China in 2017, while Northeast lobster dealers sent $142 million, according to news reports.
The tariffs hit lobster, salmon, frozen cod, frozen pollock, all flatfish, atka mackerel, herring, sablefish, geoduck, Dungeness crab, cold-water shrimp, hale and more.
Beijing hit U.S. lobster with a 25 percent tariff while lowering its tariff on Canadian lobster imports to 7 percent, making them more attractive to Chinese buyers, the Juneau Empire reported.
While China exempted from tariffs seafood imported for processing and sent back to the United States, Trump’s tariffs on Chinese imports did not exempt the processed products, which face a 10 percent U.S. levy.
That includes 70 percent of imports of frozen cod fillets and 23 percent of all frozen salmon fillets coming into the U.S. from China, including pink salmon that is reprocessed into salmon burgers and fillets.
2. Soybeans: $12.3 billion
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Top export state: Louisiana, $5.6 billion
China buys about two-thirds of the world’s soybean exports, mainly for soy protein to feed roughly 700 million pigs in that country or to make cooking oil. The soy also helps feed poultry and support fish farming. Since the tariff escalation, U.S. farmers have seen contracts with buyers in China canceled.
1. Automotive: $13.9 billion
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Top export state: Alabama, $2.2 billion
The most recently announced tariffs target passenger cars, motorcycles and various auto and engine parts. Ford and General Motors make cars in China for the Chinese market, but, for example, the Ford F150 Raptor is exported to China from the U.S. BMW, the leading U.S. automotive exporter due to a plant in South Carolina, and Mercedes, with a plant in Alabama, export U.S.-made SUVs to China, too, but don’t specify how many.
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