Global trade tensions between the US and the EU could see dairy products included in a list of proposed tariffs.
Trade tensions are rising as the US moves to impose tariffs on imported steel and other countries respond with tariffs on US goods.
US commerce secretary Wilbur Ross has said the US had made insufficient progress with its allies to reduce America’s trade deficit.
The EU has retaliated, issuing a 10-page list of tariffs on US goods ranging from Harley-Davidson motorcycles to bourbon. Canada and Mexico are also planning retaliatory moves against the tariffs.
Currently, dairy isn’t included, but potential tit-for-tat retaliation between nations could put it at risk in the future, according to AHDB Dairy.
The levy-board says such a move could affect the UK. Value-wise, the USA has accounted for 15% of UK dairy exports over the last 3 years.
There are exports from every category, but powders account for the bulk of trade. These exports have generally been growing, with overall trade up 57% from 2015 to 2017.
However total UK dairy exports have grown 42% in the same time, so the share of trade going to the US has only grown 1%.
However, AHDB Dairy says raised tariffs would make it more difficult to export to this important destination country.
Going the other way, the UK imports much less dairy from the US. In 2015 and 2016 the UK imported only £18m-£19m worth of dairy from the US per year, and in 2017 this dropped to under £4m.
If the EU raised import tariffs on dairy products from the US then the overall impact on the UK dairy industry would likely be minimal, notes AHDB Dairy.
