By Karl Plume and Susan Heavey
CHICAGO/WASHINGTON, Aug 21 (Reuters) – President Donald Trump said on Friday he will temporarily ease beef tariffs to help lower prices, although U.S. cattle producers warned the move would hurt efforts to rebuild herds and economists said it would have little effect on prices.
Trump will sign an executive order within the next two weeks expanding by 300,000 metric tons the amount of ground beef that can enter the U.S. with lower import tariffs, to be in effect for 90 days, aiming to lower prices as U.S. consumers struggle with grocery bills, the White House said.
Trump, in an earlier social media post, said he had “a commitment” that the imported meat would be sold at 25% below current market prices under the plan.
The president did not provide further details, and the White House did not respond to Reuters questions about which countries would supply the beef or discount their export prices.
“This deal will reduce prices for Americans while giving space for our Great American Beef Herd to grow again,” Trump said.
The National Cattlemen’s Beef Association, the largest lobbying group representing U.S. ranchers and cattle feeders, said Trump’s plan would hurt farmers and ranchers and could discourage expansion of the U.S. herd.
“While America’s cattle producers share the goal of keeping groceries affordable for consumers, flooding the market with government-subsidized, below-market beef is not the way to rebuild the American cattle herd,” the association’s CEO, Colin Woodall, said in a statement.
United States Cattlemen’s Association President Justin Tupper, said in a separate statement: “You don’t put America first by putting U.S. cattle producers last. This move will weaken our markets and gamble with food safety in the process.”
Persistently high food prices have become a central issue for voters ahead of November midterm elections, with Republicans seeking to shield their congressional majorities from public frustration over inflation.
Beef prices have been hovering near record highs, with U.S. cattle inventories at their lowest in 75 years, after ranchers slashed their herds due to a years-long drought that burned up grazing lands and hiked feed costs.
Supplies tightened further after the U.S. suspended imports of Mexican cattle last year amid concerns about the northward spread of a flesh-eating pest that infests livestock.
U.S. meatpackers have also been shuttering processing plants in response to soaring cattle costs.
Cattle futures on the Chicago Mercantile Exchange tumbled to eight-month lows on Friday after the announcement.
Economists and traders questioned whether Trump’s plan would noticeably bring down beef prices, as 300,000 tons over 90 days represents a small share of U.S. beef consumption, and some countries have not yet maxed out their tariff-rate quota imports.
“This is just a drop in the bucket,” said independent trader Dan Norcini. “It really does nothing to fix the main issue which is a greatly reduced supply of cattle here in the U.S. That will take time and the actions of the market to correct.”
(Reporting Karl Plume in Chicago and by Susan Heavey in Washington, additional reporting by Julie Ingwesen in Chicago; Editing by Alison Williams, Katharine Jackson and Edmund Klamann)
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