A brewing trade war between the United States and China is making Texas cattle ranchers nervous about potential tariffs on their beef exports.
Longtime cattle rancher Jason Peeler gets uneasy when he hears about a looming trade war between the United States and China, and he says he's not the only one.
“We are nervous — we’re really nervous,” Peeler said.
His unease swelled Wednesday when China retaliated against President Donald Trump's proposed tariffs by announcing plans for duties of their own on $50 billion worth of U.S. goods like soybeans and whiskey — and beef.
Cattle make up a major chunk of Texas' livestock inventory, with over 20 million cattle roaming on ranches across the state. Around 4.5 million of those cattle are used for beef.
Texas' beef industry has just started re-establishing a relationship with China; a 14-year ban on U.S. beef exports to the country was lifted just last year. Texas is only exporting a small amount of beef to the country, but the industry is still feeling the pressure, especially given a related tariff threat on pork.
“There is a relationship between pork prices and beef prices,” said David Anderson, an economist at Texas A&M University. “Cheaper pork means pork is a little more competitive for U.S. consumers' dollar.”
It also means the price of beef goes down, leading to less profit for cattle ranchers, Anderson said.
The back-and-forth between the two economic powerhouses started last month, when the Trump administration moved to tax steel and aluminum from China and other countries. China struck back earlier this week, threatening to put a 25 percent tax hike on imports from pork to pecans.
On Tuesday, the Trump administration announced $50 billion worth of proposed tariffs on Chinese valued U.S. exports such as aircraft parts and flatscreen televisions. China answered by adding beef, among other items, to their list.
The potential tax on beef could impact Texan ranchers, but Chinese consumers can get hurt even more, said Pete Bonds, a rancher in Saginaw.
“It will make the beef more expensive to the Chinese consumers — they’re actually hurting the Chinese,” said Bonds. “I’m more sad for the Chinese consumer.”