Amarillo, TX - Consumers may soon feel the brunt of more than $1 billion in retaliatory tariffs placed on U.S. products, but local beef producers are trying to stop that from happening.
This week, the World Trade Organization authorized Mexico and Canada to charge more than $1 billion in retaliatory tariffs on U.S. food products. It's all because of the country of origin label law, known as COOL.
COOL requires meat packaging to indicate where animals were born, raised and slaughtered. The Texas Cattle Feeders Association (TCFA) said the labeling has been a burden on both producers and consumers. "The cattle that are imported from Mexico and Canada are then fed in U.S. pastures and they're harvested in U.S. packing houses, but they have to be segregated so that meat can be labeled separately and kept separate," said TCFA Chairman David Baumann. "It just adds cost throughout the beef production chain. All that cost has been passed on to the consumer."
The World Trade Organization ruled the labeling discriminated against Canadian and Mexican beef, which is why the countries can now charge retaliation tariffs. Consumers will be the ones who pay them. "That $1 billion in tariffs will get passed on to the consumers and increase the price of their beef and other products," said Baumann. "It's just a bad piece of legislation. COOL was a government mandated marketing experiment that was passed roughly 10 years ago. It was bad legislation when it passed and it's still bad today."
The goal of COOL was to promote U.S. beef, but Baumann said it's failed to do that. TCFA is now urging Congress to repeal COOL so the tariffs will go away. "That way we won't see that $1 billion increase in expenses to the U.S. beef industry that will then be carried on to the consumers," said Baumann.
The House voted to repeal COOL this summer, but the Senate is still considering it.