US feed industry sees challenges from ongoing tariff tiff

20-Sep-2018 - Last updated on 25-Jul-2019 at 15:31 GMT

The US feed industry is starting to see challenges sourcing some feed ingredients stemming from ongoing trade tensions.

The American Feed Industry Association (AFIA) was among those in the feed industry to register disappointment about the announcement earlier this week that the Trump Administration would be adding $200bn in tariffs on goods coming from China starting next week.

The animal feed industry depends on imports for some of the ingredients used in both feed for production animals and pet food, said the AFIA. Some of the ingredients used are only generated in the US in small amounts.

The imposition of tariffs on products from China has already started to restrict access to Chinese products, the association said. The continuing escalation of the trade war is hindering the feed industry’s ability to grow or maintain market opportunities in China.

Members of the AFIA value fair global trade, said Gina Tumbarello, director of international policy and trade at AFIA.

“Increasing tariffs on Chinese products restricts the flow of commerce, stifles fair and open competition and leads to retaliatory measures that can further harm the animal food industry,” she said. “China is an important market with even greater potential, but the administration’s actions are not aiding the U.S. animal food industry in securing market access, but rather, further hindering it.”

The association is calling for trade officials to speak with China to address trade concerns rather than relying on tariffs, she added.

Tariff highlights

The additional tariffs are part of the continuing response from the US to China regarding the “theft of American intellectual property and focused transfer of American Technology,” according to the office of the US Trade Representative (USTR).

The upcoming tariff expansion is set to take effect on September 24, said USTR. The tariffs are expected to start at 10%, however, they also are set to increase to 25% on January 1, 2019.

The newest round of tariffs on imports from China applies to more than 5,000 products, said the USTR. The current list includes several species of live fish, fish products including meals, feather meal, animal products for use in animal feeds, cornstarch, along with alfalfa and several feed grains.

Additionally, if there is “retaliatory action” taken against US farmers or other industries, another round of tariffs on about $267bn of imports would be pursued, according to information from the Whitehouse.

The tariffs are the latest round in a series of increased taxes from both countries. Previously, the US has implemented tariffs at 25% on $50bn in goods coming from China.

In response, China's Ministry of Commerce announced that a selection of products from the US amounting to about $60bn will see additional tariffs. Those added duties also are set to start on September 24 and would apply to almost 3,000 items – an additional approximately 1,600 products will see a 5% tariff added, said the Chinese Ministry of Commerce (MOFCOM).

“In spite of China's resolute opposition and solemn representation, the US has insisted on adopting the wrong approach of violating the rules of the World Trade Organization, seriously infringing on the legitimate rights and interests of China in accordance with the rules of the World Trade Organization, and threatening China's economic interests and security,” said the ministry, according to an unofficial translation.