The Trump administrations steel and aluminum tariff gains may mean financial pain for Tyson Foods and other U.S. pork processors.
Mexico’s retaliation for the U.S. tariffstargets $1.42 billion in fresh and processed pork,a move that’s expected to hit Tyson Foods and JBS USA Holdings, a major meat processor, according to a Wednesday report by Chris Rogers, a researcher at Panjiva S&P Global Market Intelligence, which tracks global commerce.
The U.S. agriculturalfood sector will bear the brunt of the import tariffs imposed by Mexico, equivalent to $2.62 billion of products targeted. Along with the impact on pork, the trade retaliation also affects $387 million in U.S. cheese sent to Mexico, the report said.
The largest non-pork category targeted by Mexico’s response is processed foods, a category that includes sweeteners, chewing gum and others. That could leave companies like Wrigley, a major U.S. chewing gum producer, and warehouse club giant Costco “similarly exposed to the new duties,” the report said.
Mexico’s targetingof U.S. consumerproducts appeared designed to “send more of a political message” to Washington, said Rogers.
The analysis focuses on the likelyfinancial impact forU.S. companies as the nation’s traditional trading partners reciprocate for American steel and aluminum tariffs. Although the Trump administration action aidsthe U.S.metal sector, the tariffs have promptedtrade retaliation that hits other U.S. business areas including some that are part of Trump’s political base.
Mexico and Canada on June 1 were hit with 25% U.S. tariffs on steel and similar 10% tariffs on aluminum. The Trump administration levies are aimed at pressuring Mexico and Canada to accept White House demands forrevising theNorth America Free Trade Agreement.
Retaliation from Mexico, the largest export market for U.S. pork, followed Canada’s imposition of $122.8 billion in retaliatory levies on a variety of U.S. goods last week.
The escalating trade tension hasprompted concern from U.S. business sectors that face financial hits.
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“It is especially frustrating to see U.S. pork caught up in a dispute that has nothing whatsoever to do with pork trade,” the U.S. Meat Export Federation said in a statement issued in anticipation of Mexico’s retaliation.
During Tyson’s second-quarter earnings call on May 7,CEO Thomas Hayes said the Springdale,Ark.-based meat processing giant had not seen significant tariff impact on its beef business.
“That said,trade flow is incredibly important to Tyson Foods, and we continue to urge our political leaders to support efforts that provide certainty to the markets,” added Hayes.
Now, theyre imposing tariffs of their own. Time
Costco signaled concern about import tariffs last fall. Updating the risk factors faced by the Issaquah, Wash.based company, Costco said in a Securities and Exchange Commission filing that “changes and uncertainties related to government fiscal and tax policies including increased duties, tariffs, or other restrictions” could “adversely affect demand for our products and services.”
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc