Colorado agriculture gets some good news on tariffs; but trade winds still stormy for farmers, other businesses

In the midst of the U.S.-China tariff battles, there’s good news from the trade front for farmers and ranchers in Colorado and across the country: Japan is lifting long-standing restrictions on the imports of U.S. beef and President Donald Trump is lifting tariffs on aluminum and steel from Mexico and Canada.





Both announcements came late last week as farmers were figuring out how China’s latest batch of retaliatory tariffs will affect them

Agricultural products are a main target of the tariffs on $60 billion in U.S. goods. China announced the tariffs May 13 after the Trump administration boosted duties on $200 billion of Chinese goods to 25 percent from 10 percent.

“That’s big news. The restriction goes back to 2003,” Tom Lipetzky, the Colorado Department of Agriculture’s director of marketing programs said of the announcement about Japan.

Japan has agreed to eliminate the last of the age restrictions on U.S. beef that were first imposed when a case of so-called mad-cow disease was reported in 2003 in Washington state. The fatal brain disease, bovine spongiform encephalopathy, is more prevalent in older cattle. Japan initially banned all U.S. beef and then allowed meat from younger animals.

Beef is Colorado’s No. 1 agricultural export, totaling about $1 billion yearly.

“The lifting of Japanese import restrictions on U.S. beef is fantastic news for Colorado ranchers. Increased access to our leading export market for beef will provide a huge opportunity for the beef industry and further bolster science-based trade standards,” Shawn Martini, the Colorado Farm Bureau’s vice president of advocacy, said in an email.


The same day the Trump administration announced the news about Japan, it said it was repealing the tariffs imposed about a year ago on aluminum and steel from Canada and Mexico. Colorado farmers and ranchers have said they’ve faced higher costs for fencing, irrigation systems and other equipment.

Dale McCall, president of the Rocky Mountain Farmers Union’s board of directors, said his family, which farms in Yuma County, was in the process of buying a new sprinkler system when the tariffs on the metals were announced.

“The day after we got one price, they said they had to add $1,300. The tariff on steel caused it to go up that much,” McCall said.

Another problem, Lipetzky said, was that Canada and Mexico, Colorado’s top trade partners, retaliated by slapping tariffs on pork and other agricultural goods. He said the tariffs have been one of the stumbling blocks in approval of the United States-Mexico-Canada Agreement. It will replace the North American Free Trade Agreement, or NAFTA.

Leaders of the three countries struck the deal late last year, but it still has to be ratified by lawmakers of each nation.

Approval of the trade agreement will provide farmers and ranchers, already struggling with low commodity prices, a little more certainty, McCall said. “While we see the agreement as making only minor improvements over NAFTA, I guess we’ll take some minor improvements at this time.”

Still looming for Colorado farmers, ranchers and other business people is fallout from the increased tariffs on Chinese goods and the prospect of levies on $300 billion worth of new items. As payback, China is hiking fees on frozen beef from the U.S., one of the exports Colorado was gaining traction on, Lipetzky said.

The Trump administration started imposing tariffs on Chinese goods to stop what it says is ongoing theft of U.S. intellectual property and forced transfers of technology when American companies want to sell their goods in China.

“I know the trade secrets have to be addressed,” McCall said. “But one of the things that I’m still concerned about is I wish we would’ve gone together with our allies against China. I think we would’ve had more leverage.”

The outdoor recreation industry, whose economic impact in Colorado is an estimated $28 billion, already pays higher-than-average tariffs on imported goods, said Patricia Rojas-Ungar, vice president of government affairs for the Boulder-based Outdoor Industry Association.

“A lot of small businesses will have to bear these costs or pass them on to consumers,” Rojas-Ungar said.

The trade dispute has left many outdoor businesses nationwide scrambling to see if they can shift their manufacturing to other countries. Marketing, designing new products and, in some cases, expansion plans have been put on hold “so people can try to think about what do they do if these tariffs go into effect,” Rojas-Ungar said.