Battling Bump in the Wool: U.S. Farmers Feel the Heat from Trade War Fallout
U.S. wool farmers confront challenges as trade conflict disrupts China sales
A significant chunk of U.S. wool economics takes a tumble as a result of trade tussles with China, the primary buyer and processor.
Hostilities between nations, in the form of import tariffs, are giving some wool farmers a raw deal as their unsold stock intertwines with the trade war.
Approximately 50 to 60% of wool gets shipped abroad, mostly headed to China, according to the American Sheep Industry Association.
Under the current Trump administration trade policies, Americans are slapped with a whopping 145% tax rate on Chinese imports. In response, China raised its tariffs on U.S. goods imports to a mind-boggling 125% this month.
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U.S. President Trump's tariffs on China are creating cracks in the American wool industry, as a few U.S. sheep farmers complain their exports are ensnared in the ongoing trade conflict. (Kennedy Hayes/Fox News)
Some U.S. farmers assert their exports have been ensnared in geopolitical power plays.
Mike Harper runs a family-run feedlot in Eaton, Colorado called Harper's Feeders, with a capacity of 65,000 sheep. Harper divulged how the industry has been on a downturn since he was a youngster.
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Already grappling with high operational costs and minute margins, wool producers are now wrestling with additional losses connected to the new tariffs.
One Colorado cattle rancher expresses the cumulative pressure on his profits from escalating input costs and export uncertainty. (Kennedy Hayes/Fox News)
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"Losing seven to eight dollars per head on your inventory is nothing to sneeze at," Harper affirmed. "While we rely more heavily on the meat trade, it all adds up."
Some arrangements had already been made earlier this year for shipping, but when China's tariffs were reapplied, some containers were halted or rerouted, according to the American Sheep Industry Association.
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Peter Orwick is the executive director of the American Sheep Industry Association (ASI), which represents the interests of over 100,000 sheep producers spread across the U.S.
Industry analysts suggest that the disruptions in trading patterns are hitting the wool production states hard, such as California and those across the Mountain West, particularly. (Kennedy Hayes/Fox News)
"Sales set up this spring were sacrificed," Orwick shared. "If we didn't have ships leaving, they would face retaliatory tariffs, so I know we've had some containers that aren't moving."
California and Mountain West states account for the bulk of U.S. wool production, as per the Association.
Given China's position as the world's leading wool processor, American wool often finds its way overseas to be spun into yarn, fabric, or clothing, often finding its way back to U.S. consumers.
Orwick elaborated on the challenging financial health of the domestic wool industry, which has been on the skids for years. Experts claim that the senseless tariffs introduced back in 2018 crippled the industry further. The financially and emotionally draining pandemic exacerbated the problem, as the demand for stylish business attire plummeted.
"You combine that with the pandemic and the reduced demand for office attire," Orwick said, "with the advent of this retaliation, it's going to be a tough battle."
In an attempt to find alternative markets, Orwick hinted at exploring buyers from Italy and Eastern Europe.
Meanwhile, the Oval Office's resident landlord, Donald Trump, opined on the 145% tariffs slapped on China, stating they would decrease significantly, albeit not to nil, and a trade agreement with China could potentially "work out well."
- The American wool industry is feeling the impact of the trade war with China, as tariffs have increased the tax rate on imports to a staggering 145%.
- Mike Harper, a U.S. sheep farmer, states that the industry has been suffering for a long time, and the ongoing trade conflict is adding to their struggles.
- The financial markets are concerned about the impact of Trump's tariffs, as they are causing additional losses for already struggling wool producers.
- American wool is often processed in China, then returned to the U.S. as yarn, fabric, or clothing, which has been affected by the tariffs.
- Industry analysts suggest that the disruptions in trading patterns due to tariffs are particularly hard on states like California and those across the Mountain West, where most of the U.S. wool production occurs.
- Peter Orwick, the executive director of the American Sheep Industry Association, comments that sales set up for shipping this spring were sacrificed due to retaliatory tariffs.
- In an effort to find alternative markets, Orwick mentions the possibility of exploring buyers from Italy and Eastern Europe. President Trump has stated that the 145% tariffs on China will decrease significantly, although a trade agreement is yet to be finalized.
