It's Not Renegotiating Trade Terms That's Scary - It's Duking It Out with So Many Countries at OnceThu, 12 Jul 2018 10:06:20 CDT
The tough rhetoric on trade coming from President Trump and his White House Administration has created a lot of angst in the US economy as, including the cattle industry, as many of our key trading partners continue to push back. The rising tensions between nations has given way to much uncertainty in the global marketplace with the breakdown of existing market access agreements and the reciprocal threats of increased tariffs, especially in China’s case. The National Cattlemen’s Beef Association says if the most recent round of Chinese tariffs levied on US beef products holds, the cattle industry could be faced with a $70 million loss in 2018. While that is not an insignificant amount, it is not a death blow to the industry either. The value of beef exports in May alone totaled $722 million around the world. That is an important point to keep in mind says Extension Economist Dr. Glynn Tonsor, who contends having a diverse export portfolio can help mitigate things when issues such as these arise. Luckily, he says the US does in fact enjoy access to many markets worldwide. He explained the importance of this strategy in a recent interview, using Japan as an example.
“Twenty-five years ago, half of the beef volume shipped out of the US went to Japan. The US benefited by good trade with Japan, but it was very reliant on Japan from an export perspective,” he said. “Now, that number is less than one-fourth. It’s still a very important market but we’re less reliant on that one country than we used to be. That eases concerns, because if you lose access or get worse terms in one country - you have the ability to shift some product to another country if you have a foothold there doing business.”
However, while the US is set up well to handle such a problem, the situation we find ourselves in today is a bit more complicated due to the fact that we are contesting the trading agreements with several of our major markets.
“One concern that I do have is we have ongoing discussions with several of our major importing countries that kind of all came at the same time,” he said. “I wouldn’t be as concerned about it if it was just one country, but when you have it going on in several countries, it’s actually quite amazing to me that we’ve had as positive a trade reporting story in 2018 as we’ve had.”
Listen to Tonsor’s full analysis of the current export market situation and what concerns he has, with Radio Oklahoma Ag Network Farm Director Ron Hays, on today’s Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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