Following the announcements of the Trump Administration’s tariffs on Chinese steel and aluminum, China announced it was formulating a response that could include a 25 percent tariff on U.S. pork exports. The Chinese market for domestic pork has been growing steadily, already squeezing the U.S. export market, reports Reuters.
Increased prices on American pork could lead to dramatic changes in the China’s meat sector. European pork has become a strong competitor to the American product, even before the threat of a U.S.-China trade war.
“Even without the tariffs, with such low prices, we will use more domestic pork for our Chinese business,” said Luis Chein, a company director at WH Group, China’s top pork producer and its biggest importer of U.S. pork. WH Group is the parent company of Smithfield Farms.
United States Hide, Skin & Leather Association President Stephen Sothmann warned that the threat of a trade war could harm the hide, leather and skin industries.
“In 2017, China imported more than $1 billion in U.S. hide, skin and leather products, representing more than 50 percent of the total production of these products annually. The Chinese market is not just an important market for U.S. exporters, it is essential to its survival.
“Trade wars create casualties, not the economic growth that fuels businesses and economies. A constructive approach built on healthy dialogue is needed to create cooperation between the Trump Administration and the Chinese government,” Sothmann added.
The National Pork Producers Council noted in a statement that the U.S. pork industry exported $1.1 billion of product to China last year, making that country the No. 3 value market for U.S. pork.
“We sell a lot of pork to China, so higher tariffs on our exports going there will harm our producers and undermine the rural economy,” said NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio. “No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers.”
Sources: Reuters, USHLA, NPPC