Just last month, Oregon Beef Council CEO Will Wise was standing next to the meat case of a high-end grocery story in Shanghai and observed a consumer choosing U.S. beef.

The steak that the woman chose cost the equivalent of about $50, he said. “It’s cool to see people picking up expensive U.S. beef,” Wise said. He accompanied an Oregon Department of Agriculture trade mission to China, which is one of the state’s largest export markets, along with Canada.

Exports to those markets could be hindered, however, as tensions rise over U.S.-­imposed tariffs. China and Canada both have vowed to respond to President Donald Trump’s tariff hikes. China is targeting mostly agricultural products — including beef — while Canada’s list includes an array of consumer goods.

At least one Central Oregon company fears the fallout. Red Duck Foods co-founder Karen Bonner said her company signed on with a second Canadian distributor just as the country was announcing retaliatory tariffs, which are set to take effect July 1. “We’re already at kind of a price premium,” Bonner said of her company’s organic ketchup and taco sauces. “Adding 10 percent or more on that could be potentially really harmful.”

The collective impact of tariffs from China and Canada to Oregon’s economy could be about $870 million, according to Oregon Office of Economic Analysis economist Josh ­Lehner. That’s 0.4 percent of the $6.3 billion in goods that Oregon exported to those markets last year and an even smaller fraction of the state’s total exports, which totaled $21.9 billion.

With more foreign trade than most states, Oregon also has more exposure to China, Lehner wrote in an analysis prompted by talk of a U.S.-China trade war earlier this year. The “bilateral saber rattling” could hurt specific players in Oregon, such as farmers and aluminum scrap exporters, he said, but it was unlikely to derail the regional economy.

The greater risk is a broad trade war that disrupts global supply chains, Lehner said. “Should this come to pass, via continued escalation, it will be a much bigger economic problem.”

It’s only been about a year since China opened its doors to U.S. beef, which includes cattle raised in Oregon and processed in neighboring states, Wise said. He expects the tariff to go from 12 percent to 37 percent on July 6.

“If it’s implemented, it’s not good for us because we’re trying to do the early work in this market,” Wise said. “That $50 steak kind of sticks in my mind.”

Oregon Spirit Distillers owner Brad Irwin distributes in 22 states, and he’s just beginning to think about global markets. At the top of his list are Japan, China and Korea. “Those three markets are excited for American spirits,” he said. But now he’s aware that tariffs could become a factor.

Whiskey is another of the products that Canada intends to slap with a steeper tariff. Irwin thinks it will have a secondary impact on his business as other distillers who currently sell in Canada shift their focus back to the U.S. market, making it more competitive.

Because of the time zone and geographic proximity of British Columbia, it was easier to sell into Canada than to set up distribution on the U.S. East Coast, Bonner said. “It’s been great for our business to reach this market that doesn’t have as much competition.”

— Reporter: 541-617-7860, kmclaughlin@bendbulletin.com

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