NDSU STUDY CONFIRMS – EU TARIFFS HURT OUR BUSINESS

August 20, 2019

A USDBC commissioned study from North Dakota State University’s (NDSU) Center for Agricultural Policy & Trade Studies Agribusiness and Applied Economics concluded that EU retaliatory tariffs have put U.S. farmers at a price disadvantage in international markets, resulting in reduced exports and potentially lost export markets in the future.   The study looked at the impact of tariffs on the three principal types of dry beans exported to the EU; Dark Red Kidney (DRK), Navy, and Great Northern (GN). NDSU researchers concluded that tariff levels must reach an inflection point, or key level, before export amounts are negatively impacted. Specifically, for DRK, the inflection point, or key level is at 21.01% tariff rate. When tariffs exceed 21%, a 1% increase in tariffs will lead to a 17.21% decline in export volume. For GNs, the inflection point is at 16.31% tariffs. A 1% increase in tariffs, above 16.3%, will lead to a 11.33% decline in export volume. Finally, for Navy beans, the inflection point is 84.98% tariff rate. A 1% increase in tariffs, above 85%, will lead to 7.05% decline export volumes.

Annual US dry bean export levels to the EU

Accordingly, our exports to the EU are down about 8% through May and we expect to see further decreases as the tariffs remain in place. As the report suggests, the biggest decreases are in exports of DRKs and GN beans. We continue to insist on a resolution to the tariff dispute with the EU with relevant decision makers. The full report will be available on the USDBC members only website.

Posted in: Bean Bulletin