Source: Chris Scott, MEATINGPLACE, 3/27/18


President Trump’s threat last week to impose tariffs on goods made in China and Chinese counter-threats to slap tariffs on U.S. imports, including pork, have shaken the stock market and prompted an anti-tariff protest.

But concern is less evident at Smithfield Foods, the Smithfield, Va.-based pork processor owned by China’s WH Group Ltd. Smithfield CEO Kenneth Sullivan told industry analysts that a possible 25 percent tariff on U.S. pork should have a limited impact on the company's operations because it sells just 7 percent of its fresh pork to China, according to a report from Reuters. said Smithfield will find replacement markets and may even continue to ship to China if the tariffs are imposed. He added that investors are overreacting to the tariff threats with regard to the parent company’s stock, which has fallen by 12 percent since last week.

Representatives from both sides in the U.S.-China trade dispute reportedly have launched quiet negotiations to boost U.S. access to markets in China, according to the Wall Street Journal. A spokesperson for Treasury Secretary Steven Mnuchin told the newspaper that Mnuchin has spoken with Chinese economic official Liu He to establish a dialogue seeking a mutually agreeable strategy to reduce what is estimated to be a $375 billion trade imbalance with China.

WH Group this week reported a slight decline in net income in fiscal 2017 to $7.54 a share versus $7.58 in 2016, although sales increased by 3.9 percent to $22.4 million. WH Group noted that China is the world’s largest pork producer and consumer, and even though the United States shipped 5.6 billion pounds of animal protein in 2017, exports to China actually fell from 2016 levels as China added its own slaughtering facilities.

Meanwhile, a group of more than 100 agribusinesses, national and state agricultural associations and retailers are working together to oppose the U.S. tariffs through action potentially involving U.S. lawmakers. Americans for Farmers & Families – which includes the National Pork Producers Council, National Turkey Federation and several state lawmakers – is providing information outlining the impact of the North American Free Trade Agreement (NAFTA). The group wants to move the administration’s focus toward previously announced commitments to improve NAFTA and away from what the group described as “job-killing tariffs” that have a negative effect on American businesses beyond U.S. agriculture.

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