$1 billion in tariffs will hurt struggling meat industry; experts call for repeal of COOL laws
Industries subject to new tariffs
Many industries will be affected by the World Trade Organization’s ruling to allow just more than $1 billion in tariffs on U.S. exports to Canada and Mexico. Below is a list of U.S. goods that will be considered for retaliation. Goods may be added to the list.
» live bovine animals
» live swine
» meat of bovine animals, fresh or chilled
»meat of bovine animals, frozen
» meat of swine, fresh, chilled or frozen
» cuts of offal, fresh or chilled, of spent fowl
» cheese, not including the following: fresh (unripened or uncured) cheese, whey cheese or curd; grated or powdered; processed cheese; blue-veined cheese or cheese containing veins produced by Penicillium roquefort
» apples, fresh
» cherries, other than sour cherries
» cherries, provisionally preserved (unsuitable in that state for immediate consumption)
» corn (maize)
» semi-milled or wholly milled rice, whether or not polished or glazed
» prepared or preserved-prepared meals of spent fowl; prepared meals of specially defined mixtures
» prepared or preserved-specially defined mixtures, other than in cans or glass jars; spent fowl other than in cans or glass jars
» prepared or preserved swine cuts, other than ham and cuts thereof; other than shoulder and cuts thereof
» prepared or preserved meat of bovine animals
» maple sugar and maple syrup
» glucose and glucose syrup, containing in the dry state at least 20 percent but less than 50 percent by weight of fructose, excluding invert sugar
» certain fructose and fructose syrup, containing in the dry state more than 50 percent by weight of fructose, excluding invert sugar
» chocolate and other food preparations containing cocoa-preparations in blocks, slabs or bars weighing more than 2 kg or in liquid, paste, powder, granular or other bulk form in containers or immediate packings, of a content exceeding 2 kg
» other chocolate and other food preparations containing cocoa-ice cream mix or ice milk mix; chocolates; chocolate coated nuts and other confectionery
» pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, lasagna, gnocchi, ravioli, cannelloni; couscous, whether or not prepared
» prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn flakes); cereals (other than maize [corn] in grain form or in the form of flakes or other worked grains (except flour, groats and meal), pre-cooked or otherwise prepared, not elsewhere specified or included
» bread, pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products
» certain potatoes, prepared or preserved otherwise than by vinegar or acetic acid, frozen
» frozen orange juice
» tomato ketchup and other tomato sauce
» wine of fresh grapes, including fortified wines; certain grape must
» ethyl alcohol and other spirits, denatured, of any strength
» certain sugars, chemically pure, other than sucrose, lactose, maltose, glucose and fructose; sugar ethers, sugar acetals and sugar esters, and their salts
» peptones and their derivatives; other protein substances and their derivatives, not elsewhere specified or included; hide powder, whether or not chromed
» articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal
» certain tubes, pipes and hollow profiles, welded, of circular cross-section, of stainless steel
» parts for non-electric heating appliances
» grinding balls and similar articles for mills, forged or stamped, but not further worked, of iron or steel
» swivel seats with variable height adjustment
» wooden furniture of a kind used in offices
» mattresses of materials other than cellular rubber or plastics, whether or not covered
Source: North American Meat Institute
In a year when most cattlemen on the feedlot and processing side of the industry are already struggling, more than $1 billion in additional tariffs on exports to Mexico and Canada have been approved by the World Trade Organization.
“I think it could have a negative impact on the market at a time when we don’t need it,” said Steve Gabel, owner of Magnum Feedlot in Wiggins.
The WTO ruled Mexico and Canada could impose $1.01 billion in tariffs on United States exports in retaliation for what has been deemed unfair labeling laws enacted in recent years by Congress. U.S. agriculture experts are asking the Senate to reconsider the labeling laws. The House voted in June to repeal the mandatory country-of-origin labeling laws, or COOL laws.
The laws require retail grocers to inform consumers about the country or countries of origin of certain foods, which mean producers have to track the cow’s country of origin throughout its whole life, a costly requirement.
The list of potential tariffs also includes goods outside the beef and pork industries. There are nearly 40 items on which Canada and Mexico can impose the retaliatory taxes. Producers and industry experts expect Canada and Mexico to begin putting the new taxes in place in the coming weeks, likely before the end of the year.
“I imagine countries will want to impose the maximum amount of tariffs as soon as possible,” said Steve Kay, editor and publisher of Cattle Buyer’s Weekly.
“The only reason it would not happen is if the U.S. puts forward a measure to repeal the COOL provisions.”
Gabel said the other North American countries are “well within in their rights” to impose the tariffs. He said the writing and rewriting of the labeling laws in recent years has put the United States in contention with the North American Free Trade Agreement.
“That Congress can’t get it that our mandatory laws are against the free-trade agreements we have with those two countries baffles me,” Gabel said. “They’ve tried to change them twice — maybe three times — to satisfy the WTO trade agreements and they’ve yet to be successful in doing so.”
The last couple of years have been among the most profitable on record for those on the cow-calf side of the beef business. But, the feedlot and processing side of the business have struggled in recent times, and the tariff ruling by WTO is bound to continue the pain.
Gabel said about five years ago, 80 percent of his finishing cattle came from Mexico.
Once the labeling laws were imposed, he started losing about $30 per head of cattle, so he stopped much of the purchasing from outside of the United States. Many other producers followed.
The North American Meat Institute put out a statement Monday calling the labeling laws “the most costly and cumbersome rules ever imposed on the agricultural sector.”
Janet Riley, senior vice president of public affairs for the institute, said it’s important to remember there will be many agricultural industries affected, not just meat and livestock.
“Soon, a host of industries, ranging from cherry producers to maple syrup processors to wooden furniture and mattress makers, could pay the penalties for this debacle created by some anti-trade organizations who fought for the law,” the statement by the North American Meat Institute said.
Riley hopes the push back will cause the Senate to consider the issue with more urgency.
“Hopefully this will inspire Congress to act because we’re not just harming the U.S. meat industry,” Riley said. “It’s going to affect a number of industries.” ❖
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