Tariffs hurt US industries, consumers

NEW YORK - United States spirits exports to China amounted to $12.8 million in 2017, up from just $959,000 in 2001. But the ongoing trade tension between the US and China has cast a shadow over the otherwise promising growth.

The White House announced 25 percent tariffs on $34 billion of Chinese products this month, escalating trade tensions between the US and China. China retaliated with duties on the same value of US goods.

The retaliatory tariffs China has imposed on US whiskeys could "put the brakes on an American export success story", said Christine LoCascio, senior vice-president of international affairs at the Distilled Spirits Council of the United States.

In the latest escalation of its trade offensive against China, the US said on July 10 that it will impose 10 percent tariffs on an additional $200 billion of Chinese imports.

LoCascio and her colleagues used to be upbeat about US whiskey's long-term export growth in China, which last year further lowered its tariffs on whiskeys and brandies to 5 percent as part of a wider effort to lower tariffs on a range of consumer goods imports.

Now LoCascio can only hope the two largest economies "soon resolve their differences" so that the interests of US whiskey exporters and farmers, as well as Chinese consumers can be protected.

The tit-for-tat tariffs are going to have a huge ripple effect on the US economy, experts and industry leaders said.

Like the whiskey distillers, US farmers producing soybeans, dairy, cotton, lobsters, apples and much more, are feeling the heat.

"The tariffs will impact almost everybody in Maine as people in the state are more or less involved in the industry," said Annie Tselikis, executive director of the Maine Lobster Dealers' Association.

China accounts for 15 to 20 percent of the export value of US lobsters, she said. There are roughly 4,500 licensed lobster catchers in Maine and about 10,000 to 12,000 people are directly employed in the industry.

With China's retaliatory tariffs, Tselikis said the US lobster industry will further lose its edge over its main rivals, such as Canada, which struck a trade agreement with the European Union last year that will cut tariffs on lobsters in five years.

"Soybeans are the top agriculture export for the United States, and China is the top market," John Heisdorffer, president of the American Soybean Association, said in a recent statement. "The math is simple. You tax soybean exports at 25 percent, and you have serious damage to US farmers."

Jaime Castaneda, senior vice-president of the US Dairy Export Council, said the retaliatory tariffs have been a "one-two punch" that has left the industry reeling.

Dairy producers, who had three years of low prices, were expecting to get back to profitable margins this fall. "All that is gone now," Castaneda said.

The China market has significant growth potential for US apple farmers, said Tracy Grondine, a spokesperson for the US Apple Association.

The industry gained access to the China market - the largest consumer market in the world - about three years ago. Now China is its sixth-largest export market, according to Grondine.

"If momentum is lost it will be difficult to regain. What we will likely see happening in the short term is apples that were destined for export markets will instead overhang the US market," she said.

The decision to impose tariffs on Chinese goods will also impact a wide range of US industries because of the intricate links with international supply chains. For example, the tariffs will affect parts of planes and vehicles made in China.