US pork on the Chinese tariff list

US pork on the Chinese tariff list

China’s threat of steep tariffs on American pork imports will put further pressure on an industry already facing weaker demand from the world’s top buyer of the meat. Some industry participants said the tariffs and the threat of a brewing trade war between China and the United States would create more Chinese demand for European pork exporters, who have boosted supplies to China in the last two years after sanctions on Russia closed one of the region’s key markets.

“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 has also been increasing its supplies from South American and European countries in recent years, said Chein.

Rapid expansion of large-scale pig farms in China has been boosting domestic supply and lowering production costs. As a result, China’s pork prices are currently hovering around 10 RMB (1.58 USD) per kg, their lowest level in nearly four years and already squeezing demand for imports. It is not yet clear if or when China will implement the tariffs in response to U.S. President Donald Trump’s plans for tariffs on up to 60 billion USD in Chinese goods.

Even so, overall Chinese pork imports are set to fall by as much as 30 percent this year because of the decline in domestic hog prices, said Feng Yonghui, chief researcher with industry website Soozhu.com. “Currently U.S. pork doesn’t have much of an advantage,” said Feng.

An importer based in eastern China’s Shandong province said: “With those tariffs, we wouldn’t import U.S. pork. We would just import from Germany and Denmark.” China plays a valuable role in the global pork market because of its demand for “variety meats” - pig feet, elbows and offal - which have little value otherwise. The United States was by far its biggest overseas supplier of those parts last year, shipping 416,000 tonnes, worth 874 million USD. Germany was a distant second with 147,000 tonnes, according to Chinese customs data. Total U.S. pork exports to China were worth 1.16 billion USD.

“This tariffs on U.S. pork will have a big impact on our import trade but our company also does domestic pork so overall the impact is not so bad,” said an import manager at Beijing Changxinchang Food Products Co Ltd.