The National Pork Producers Council said China rolling back retaliatory tariffs on U.S. pork is good news for U.S. pork producers and Chinese consumers.
However, the Canadian Meat Council warns China’s rollback of tariffs on U.S. pork further jeopardizes Canada’s competitive position in that market.
This past year the U.S. trade dispute with China resulted in a build-up of Chinese retaliatory tariffs on U.S. pork which hit 60 per cent on September 1 on top of the existing 12 per cent duty.
Recently, reports indicated China is rolling back its tariffs on U.S. Pork and U.S. soybeans.
Jim Monroe, the Senior Director of Communications with the NPPC, said the Chinese tariffs caused an estimated loss to American pork producers of eight dollars per hog sold in the U.S. If the Chinese media reports are accurate, it’s a most welcome development.
“China has been struggling with African Swine Fever since August of 2018 decimating its domestic herd, making serious declines to its domestic production. You’re starting to see reports of pork prices for consumers rising significantly, and pork is a staple of the Chinese diet,” said Munro. “China is an important export market for U.S. producers, usually in the top five export markets. It’s even more critical now that they’re dealing with African Swine Fever.”
He said it represents a historic opportunity to increase exports to China at a time when they need it, and when Chinese consumers need more supplies.
“We’re hopeful that we can compete more effectively for that opportunity and we’ll see what happens as we move forward.”
Monroe pointed out the U.S. pork sector is highly export-dependent, selling more than 25 per cent of its pork production to other countries — so every export market is essential.
“The sector moved along in expansion mode the past couple of years with new packing capacity coming online and record production levels, and most of the investment to drive this expansion came on the promise of exports,” Munro said.
On the other hand, the Canadian meat industry said China’s rollback of tariffs on U.S. pork further jeopardizes Canada’s competitive position in that market.
In June, China suspended Canadian pork and beef imports in response to the discovery of fraudulent export certificates that had identified the non-Canadian product as Canadian.
Since then, the Canadian Embassy in Beijing and the Canadian Food Inspection Agency have worked with China Customs to implement safeguards to ensure a more rigorous Canadian certification system.
Canadian Meat Council President and CEO Chris White said the news that China is rolling back tariffs on U.S. pork heightens the urgency of the situation.
“Ever since the suspension there is an urgency because, as you can appreciate, those markets are critical to the bottom line of any number of Canadian companies,” said White. “As an export nation, when you have those opportunities, you want to maximize them. Since the Americans are not a signatory to the CPTPP, which gave Canadian companies a distinct advantage. So the rollback of the tariffs certainly is to the benefit clearly of the Americans, so it further disadvantages Canadian companies.”
He said the longer the suspension is in place, even when it comes off, it won’t be easy to get back into the Chinese market at the levels before the imposition of the suspension. It does allow the Americans to secure a higher percentage of those markets, particularly now that their tariffs are rolled back for them. It’s just a cumulative effect that none of this is good for Canadian companies.
White said Canada is currently waiting for an official reaction from China to the changes.
He is hopeful the appointment of Dominic Barton as Canada’s next ambassador to China will help kick start the discussions. •
— By Harry Siemens