WASHINGTON – A trade truce between China and the United States during the G-20 summit came as good news to officials representing the interests of US red meat exporters. After what was referred to as a “highly successful meeting” between President Donald Trump and China’s President Xi Jinping, additional tariffs on $200 billion worth of products will not be implemented on Jan. 1, 2019 as announced earlier this year. The tariff rate will remain at 10 percent and will not be raised to 25 percent next month, the White House said in a statement.
Meanwhile, “China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” according to the White House. “China has agreed to start purchasing agricultural product from our farmers immediately.” The news followed the Nov. 30 announcement of a trade agreement that updated what was formerly known as the North American Free Trade Agreement.
Meat industry trade groups lauded the signing of the US-Mexico-Canada Agreement (USMCA) and stressed the importance of formally resolving the trade dispute with China.
According to Dermot Hayes, Ph.D., an economist at Iowa State Univ., total retaliatory tariffs in 2018 will cost US pork producers approximately $1.5 billion, based on 125 million hogs being slaughtered during the year. Between tariffs from Mexico and China, Hayes said exporting US pork producers are realizing losses during what would otherwise be a profitable year. Based on the dispute with China alone, Hayes estimated US pork producer losses will be $1 billion, or $8 per animal.
Dan Halstrom, president of the US Meat Export Federation (USMEF), said the progress being made at the summit is encouraging.
“USMEF supports the Trump administration’s efforts to finalize the USMCA and to continue seeking resolution of the metal tariffs dispute with Mexico and Canada, which resulted in retaliatory duties on US pork and beef. US meat exports have also become entangled in trade disputes with China, so it is encouraging to see the US and China return to the negotiating table,” Halstrom said. “Global demand for US red meat is very strong, but exports cannot reach their full potential until the retaliatory duties imposed by Mexico, China and Canada are removed.
Julie Anna Potts, president and CEO of the North American Meat Institute, agreed that the USMCA is a positive development toward securing future pork and beef trade in Mexico and Canada, where beef exports totaled $1.7 billion in 2017 and pork exports topped $2.3 billion.
“The North American Meat Institute applauds the recent signing of the US-Mexico-Canada trade agreement, which modernizes the North American Free Trade Agreement,” she said. “USMCA represents a positive step in preserving duty-free access to two of the US meat and poultry industry’s most critical foreign markets.”
She added: “Although the agreement signed last week safeguards the core tenets of NAFTA that have strengthened the US meat sector and overall economy, those benefits will not be fully realized until the three countries work to remove tariffs currently in place. The Meat Institute continues to encourage the administration to lift steel and aluminum tariffs on imports from Canada and Mexico, and urges Canada and Mexico to, in turn, remove retaliatory tariffs on US meat exports.”