Although the beef sector is not yet directly concerned, there are fears that China will hit back with an even wider list of goods. In early April, China announced tariffs on US$3 billion of U.S. goods such as pork and wine in retaliation for the steel and aluminium tariffs imposed by Trump. China, the U.S. biggest export market for soybeans, has now said would apply a tariff on the product.

While the U.S. is not expected to apply its tariffs until June, China is reported to have listed U.S. goods from soybeans to beef, which could potentially incur a 25% import tariff by the end of May if Washington goes ahead with the imposition.

Speaking at the Whitehouse, President Trump said the U.S. farmers would be better off in the long term. “They understand that they’re doing this for the country. And we’ll make it up to them. And, in the end, they’re going to be much stronger than they are right now.”

A trade war is expected to be detrimental to the U.S. beef industry, which has seen an annual increase in supplies even as prices have been falling for market-ready cattle. China opened up again to U.S. beef exports in 2017, after a 13-year absence. According to the U.S. Meat Export Federation (USMEF), some restrictions remain in place as well as a 12% duty on U.S. beef imports. Total U.S. beef exports to China totalled 3,020 tonnes worth US$31 million in the second half of 2017.

Sources: Reuters/CNN/Bloomberg