China proposes tariff increase on U.S. beef products, potentially impacting Texas beef industry

China proposes tariff increase on U.S. beef products, potentially impacting Texas beef industry
U.S. beef products (Source: KFDA)

AMARILLO, TX (KFDA) - As administrations and governments change over the years, trade relations can, as well.

Get the latest Amarillo news straight to your phone! Apple | Android

"We just regained access to China in 2016 and we've been working out the details for the export protocol since then," said Josh Winegarner, Director of Government Relations with the Texas Cattle Feeders Association.

But as trade opportunities open up internationally, they also trickle down to local industries like the ones right here in Texas.

"China is a growing market for Texas agriculture products, especially beef," said Winegarner. "It has the potential to be a huge economic driver and be beneficial for our local economy."

However, in what appears to be retaliation to proposed tariffs on Chinese goods by the Trump administration earlier this week, the Chinese government issued its own challenge on Wednesday, proposing 25-percent tariffs on many U.S. goods, including U.S. beef products.

"When a tariff is placed, technically, we always have what we call in economics, the producer-consumer effect," said John Francois, Assistant Professor of Economics at West Texas A&M University.

He says this could raise the prices of U.S. beef in China.

"From a purely economic perspective, they're going to make U.S. beef products a little more expensive, people are going to cut down on buying U.S. beef products," said Francois.

With higher prices, Francois points out that demand could lower and not as much supply would be needed, potentially hurting area beef producers.

The Texas Cattle Feeders Association, however, remains positive that American products will prevail.

"That middle-class population wants beef and they want American beef," said Winegarner. "We're happy to provide it for them, we just have to get around all of these trade disputes."

In the list of proposed tariffs released Wednesday, soybeans were also listed, having a potential impact on multiple agriculture-related industries.

No start date for imposing the tariffs has been announced at this time and trade negotiators are expected to discuss the matter.

Copyright 2018 KFDA. All rights reserved.