Source: Tom Johnston, MEATINGPLACE, 5/29/18



President Donald Trump announced today he will move forward with a plan to impose a 25 percent tariff on $50 billion in Chinese imports and set restrictions on Chinese investment in U.S. high tech industries, a move that ratchets up trade tensions and complicates efforts by the U.S. red meat and poultry industries to gain wider market access in that lucrative Asian market.
Immediately caught up in the trade dispute were U.S. pork producers, with China in March having slapped a 25 percent tariff on U.S. pork in retaliation for U.S. tariffs on aluminum and steel. China added U.S. beef to its list in April.

“Since March 1, when speculation about Chinese retaliation against U.S. pork began, hog futures have dropped by $18 per animal, translating to a $2.2 billion loss on an annualized basis,” said Iowa State University economist Dermot Hayes. “While not all of this lost value can be attributed to trade friction with China, it is certainly the main factor.

The trade row comes as the U.S. pork industry increases production to record levels and depends on exports, which accounted for more than $53 of the average $149 of a hog last year, according to the National Pork Producers Council (NPPC). With five new pork processing plants in or soon to be in operation, U.S. pork production capacity will increase 10 percent from 2015 levels by 2019, the group noted.

“Eliminating punitive tariffs and improving access to China by eliminating or reducing tariffs on frozen and chilled pork would result in an explosion of pork exports, contributing significantly to U.S. economic growth and reduction of the trade deficit,” NPPC President Jim Heimerl said in a news release.

The timing also has been terrible for the U.S. beef industry, which just last year regained access to the Chinese market after Beiing lifted a 13-year ban imposed on fears of bovine spongiform encephalopathy.

In the second half of 2017, following the market reopening, U.S. beef exports to China totaled 3,020 metric tons valued at $31 million, according to the U.S. Meat Export Federation. In January 2018, exports reached the highest monthly volume to date, at 819 metric tons valued at $7.5 million.

“USMEF is hopeful that this trade dispute can be resolved without China introducing additional obstacles for U.S. beef,” USMEF President and CEO Dan Halstrom said in April.

Also pushing for improved access to the Chinese market, is the U.S. poultry industry, which will press China to drop an avian influenza-related ban on U.S. poultry imports as part of the ongoing trade talks, according to a report by Reuters.

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