Earlier this week, the US Meat Exporters Federation Vice President Erin Borror was reported in several media outlets saying that US beef and pork exports to China have stopped. This was inevitable as retaliatory tariffs introduced by China on the US for beef and pork are between 147% and 172% making trade simply no longer commercially viable. In addition, the export licenses for US beef exporters which expired in March this year have not been renewed, a further reason why beef exports to China are no longer possible.
While the US administration has reviewed its tariff policy with China to remove additional tariffs on specific categories such as mobile phones and computers, this has not been reciprocated by China.
Fall out
In a recent interview with CNN, US Agriculture Secretary Brooke Rollins acknowledged that beef and pork exports to China had collapsed. She also pointed out that Brazil and Argentina were taking advantage of the deficit created by the absence of US supply. She also took aim at Brazil and Argentina as well as China and the UK for adopting unfair trade practices against US agricultural products. As well as import taxes she also highlighted sanitary barriers which are indeed significant for US exports to the UK and EU.
Trade disruption
China has no shortage of options to replace the US as a supplier of agri food products. Over the past week, China approved a further 17 Australian sheep and goat meat processing facilities and new approvals have been ongoing in Brazil over the past two years. Brazil in particular has picked up grain export opportunities to China as well as beef while European countries can easily pick up any pig meat opportunity.
For the US, China has been a significant market for meat, dairy and grain exports and while alternatives can be found, it will require considerable reorientation. The sudden nature of the impact of tariffs makes the job more difficult but not impossible as the US has a strong market presence elsewhere in the world.
Wider implications
With the penal level of tariffs in place just a matter of weeks, the full impact isn’t yet felt. However there is a clear impact taking place on trade between the world’s top two economies. The first clues in changing trade patterns are to be found in future transport planning and the Economist this week reports a sharp drop off in the booking of shipping containers and sea transport for goods between both countries. Exporters in both directions are hoping that the tariffs will be a short-lived shock and that a negotiation will take place soon but when the negotiations take place is yet to be determined.
Comment – Irish agriculture is okay, but only for now
Irish farmers and agri food exporters can watch on with interest and a degree of comfort that this US – China spat doesn’t have a direct impact. There was widespread relief when the US decided to defer the introduction of extra tariffs on the EU for 90 days meaning that nothing extra has to be paid in the meantime. However the clock is ticking on this suspension and there is a clear issue in the US administration with the EU and indeed the UK position on food safety controls. If a resolution isn’t found and tariffs return, then Irish dairy in particular would be back in the firing line, so it is the case that we are okay but only for now.
Read more
US tariffs will cool beef import demand
Dempsey at Large: tariff compensation for US farmers
Long way from US vice president’s positive comments to a trade deal for the UK
Earlier this week, the US Meat Exporters Federation Vice President Erin Borror was reported in several media outlets saying that US beef and pork exports to China have stopped. This was inevitable as retaliatory tariffs introduced by China on the US for beef and pork are between 147% and 172% making trade simply no longer commercially viable. In addition, the export licenses for US beef exporters which expired in March this year have not been renewed, a further reason why beef exports to China are no longer possible.
While the US administration has reviewed its tariff policy with China to remove additional tariffs on specific categories such as mobile phones and computers, this has not been reciprocated by China.
Fall out
In a recent interview with CNN, US Agriculture Secretary Brooke Rollins acknowledged that beef and pork exports to China had collapsed. She also pointed out that Brazil and Argentina were taking advantage of the deficit created by the absence of US supply. She also took aim at Brazil and Argentina as well as China and the UK for adopting unfair trade practices against US agricultural products. As well as import taxes she also highlighted sanitary barriers which are indeed significant for US exports to the UK and EU.
Trade disruption
China has no shortage of options to replace the US as a supplier of agri food products. Over the past week, China approved a further 17 Australian sheep and goat meat processing facilities and new approvals have been ongoing in Brazil over the past two years. Brazil in particular has picked up grain export opportunities to China as well as beef while European countries can easily pick up any pig meat opportunity.
For the US, China has been a significant market for meat, dairy and grain exports and while alternatives can be found, it will require considerable reorientation. The sudden nature of the impact of tariffs makes the job more difficult but not impossible as the US has a strong market presence elsewhere in the world.
Wider implications
With the penal level of tariffs in place just a matter of weeks, the full impact isn’t yet felt. However there is a clear impact taking place on trade between the world’s top two economies. The first clues in changing trade patterns are to be found in future transport planning and the Economist this week reports a sharp drop off in the booking of shipping containers and sea transport for goods between both countries. Exporters in both directions are hoping that the tariffs will be a short-lived shock and that a negotiation will take place soon but when the negotiations take place is yet to be determined.
Comment – Irish agriculture is okay, but only for now
Irish farmers and agri food exporters can watch on with interest and a degree of comfort that this US – China spat doesn’t have a direct impact. There was widespread relief when the US decided to defer the introduction of extra tariffs on the EU for 90 days meaning that nothing extra has to be paid in the meantime. However the clock is ticking on this suspension and there is a clear issue in the US administration with the EU and indeed the UK position on food safety controls. If a resolution isn’t found and tariffs return, then Irish dairy in particular would be back in the firing line, so it is the case that we are okay but only for now.
Read more
US tariffs will cool beef import demand
Dempsey at Large: tariff compensation for US farmers
Long way from US vice president’s positive comments to a trade deal for the UK
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