Squealing over pork: Tariffs may hit Tyson, Costco
The Trump administration’s steel and aluminum tariff gains may mean financial pain for Tyson Foods and other U.S. pork processors.
Mexico’s retaliation for the U.S. tariffs targets $1.42 billion in fresh and processed pork, a move that’s expected to hit Tyson Foods and JBS USA Holdings, a major meat processor, according to a Wednesday report by Chris Rogers, a researcher at Panjiva S&P Global Market Intelligence, which tracks global commerce.
The U.S. agricultural food sector will bear the brunt of the import tariffs imposed by Mexico, equivalent to $2.62 billion of products targeted. Along with the impact on pork, the trade retaliation also affects $387 million in U.S. cheese sent to Mexico, the report said.
The largest non-pork category targeted by Mexico’s response is processed foods, a category that includes sweeteners, chewing gum and other products. That could leave companies such as Wrigley, a major U.S. chewing gum producer, and warehouse club giant Costco “similarly exposed to the new duties,” the report said.
Costco is mentioned because it offers a wide range of its own private-label products.
Mexico’s targeting of U.S. consumer products appeared designed to “send more of a political message” to Washington, Rogers said.
The analysis focuses on the likely financial impact for U.S. companies as the nation’s traditional trading partners reciprocate for American steel and alu- minum tariffs. Although the Trump administration action aids the U.S. metal sector, the tariffs have prompted trade retaliation that hits other U.S. business areas, including some that are part of Trump’s political base.
Mexico and Canada were hit with 25% U.S. tariffs on steel and similar 10% tariffs on aluminum on June 1. The Trump administration levies are aimed at pressuring Mexico and Canada to accept White House demands for revising the North American Free Trade Agreement.
Retaliation from Mexico, the largest export market for U.S. pork, followed Canada’s imposition of $122.8 billion in retaliatory levies on a variety of U.S. goods last week.
The escalating trade tension has prompted concern from U.S. business sectors that face financial hits.
“It is especially frustrating to see U.S. pork caught up in a dispute that has nothing whatsoever to do with pork trade,” the U.S. Meat Export Federation said in a statement issued in anticipation of Mexico’s retaliation.
During Tyson’s second-quarter earnings call May 7, Chief Executive Officer Thomas Hayes said the Springdale, Ark.-based meat processing giant had not seen significant tariff impact on its beef business.
“That said, trade flow is incredibly important to Tyson Foods, and we continue to urge our political leaders to support efforts that provide certainty to the markets,” Hayes added.
Costco, which is based in Issaquah, Wash., signaled concern about import tariffs last fall.