Source: Tom Johnston, MEATINGPLACE, 8/6/19


The Trump administration’s move to impose a 10% tariff on an additional $300 billion in Chinese goods has been met with some tangible resistance already, according to multiple media reports.  

Bloomberg reported that Beijing scrapped a purchase of 14,700 metric tons of U.S. pork, its largest cancellation to date, and the Chinese government is urging state-owned firms to suspend purchases of U.S. agricultural products.

“China is just fighting back — they canceled all that business, and that just has the market reeling,” Dennis Smith, senior account executive at Archer Financial Services Inc. in Chicago, is quoted as saying. “We’ve got way too much pork if we can’t get a big export program going.”

Reuters quoted China’s Commerce Ministry as confirming on Tuesday that Chinese companies have stopped buying U.S. agricultural products and warning China may also impose additional tariffs on U.S. farm products. 

“China’s announcement that it will not buy any agricultural products from the United States is a body blow to thousands of farmers and ranchers who are already struggling to get by,” said American Farm Bureau Federation (AFBF) President Zippy Duvall in a statement.

On Monday, China also weakened the yuan to its lowest level in a decade, making imports of U.S. products more expensive. The United States responded by designating China a currency manipulator.

Hog futures fell 17% last week, the largest decline for most-active futures since July as a supply glut in the U.S. combines with uncertainty over trade with China to intensify market volatility, according Bloomberg.

U.S. pork producers built up their herds in anticipation of serving Chinese demand amid an outbreak of African swine fever in that country, which, according to Rabobank, has reduced pork supply there by 13 million tons in the last year. But a trade spat between the two countries has stymied U.S. pork exports, with the National Pork Producer Council estimating that they’re losing out on $1 billion in sales per year.

According to AFBF economists, U.S. agriculture exports to China were down by $1.3 billion during the first half of the year.
“Now, we stand to lose all of what was a $9.1 billion market in 2018, which was down sharply from the $19.5 billion U.S. farmers exported to China in 2017,” Duvall said.

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