Tariffs could hinder a growing market for U.S. beef in China
Cattle producers like John and Amy Jo Estes applauded after President Donald Trump struck a deal with China that would allow U.S. beef to stream back into the Chinese market. Now, China’s proposed retaliatory tariffs have the same producers asking for a truce during budding trade tensions.
Agriculture is a family business for John and Amy Jo Estes. The couple met while attending MU and moved back to John Estes’ family farm in Rosebud, Missouri, in 1993. The original deed to the family’s 160 acres in Gasconade County dates back to the early 19th century — John Estes’ 82-year-old father inherited the land from his father, who inherited the land from his father.
Underneath their plot, the ground is full of rocks and clay — not ideal for cash crops like corn and wheat, but well-suited for grazing animals like cattle and sheep. Cottonwood trees line rolling hills of crisp green grazing ground cut by a single dirt road, a small creek and crossties that organize their land into controllable, sustainable patches for gnawing cattle.
Nearly two centuries and an additional 700 acres later, working on the farm has not proven as easy, or financially viable, when compared to previous generations in the Estes family. Being a farmer is similar to gambling for John and Amy Jo Estes because they never know what will happen with cattle prices, the weather or the government.
A conversation with John and Amy Jo Estes
“On the good years, you have to store money away and invest it wisely,” John Estes said. “If you invest in a different piece of equipment, is it going to pay? Is there a tax advantage to doing that? It’s in the back of everybody’s mind all the time and you have to be prepared for it.”
Now, John Estes said he feels the gambling is in Trump’s hands, and Trump could be using their money to pay the bill.
On April 4, in response to the $50 billion worth of tariffs Trump levied on China for unfair trade practices, China’s Ministry of Commerce issued a proposal to impose a 25 percent tariff on a variety of goods, according to a statement by the United States Department of Agriculture.
Nearly one-third of the proposed tariff items would target U.S. food and agriculture commodities, including beef. If implemented, they would impact approximately $16.5 billion worth of Chinese imports of food and agriculture products from the U.S, according to the statement.
“Somebody, somewhere, sometime is going to have to stand up to China, and the problem is that it’s going to hurt, and it’s going to hurt somebody along the way,” John Estes said. “It’s looking like it might be us this time.”
China, along with Japan and South Korea, banned imports of American beef in 2003 after the first case of mad cow disease was discovered in Washington state. The U.S. provided China 70 percent of their total imports before the ban went into effect, according to the USDA.
Yet demand for beef in China was nowhere near its current level, and cattle producers in the U.S. had to sit on the sidelines as China’s beef imports grew from $275 million in 2012 to $2.5 billion in 2016, according to the USDA.
China’s cattle imports increase
The exporting hiatus ended last June when the Trump administration finalized a deal with Chinese President Xi Jinping that would allow American beef to be exported into the country for the first time in over a decade.
“If a tariff is put into place, you are really looking at lost growth potential,” U.S. Meat Export Federation spokesperson Joe Schuele said. “It’s not a major market situation where large volumes of beef are being closed. It’s really a market we just entered and haven’t even scratched the surface.”
When the Trump administration announced the deal with China, the National Cattlemen’s Beef Association praised the president for reopening the door to a foregone relationship, but now they’re voicing concern that a trade war could harm their efforts.
“It is unsettling to see American-produced beef listed as a target for retaliation,” Kent Bacus, an international trade representative with the NCBA, said in a statement. “Sadly, we are not surprised, as this is an inevitable outcome of any trade war. This is a battle between two governments, and the unfortunate casualties will be America’s cattlemen and women and our consumers in China.”