WASHINGTON, D.C., Sept. 13, 2019 – This morning, Chinese media reported that it was suspending the imposition of punitive tariffs on U.S. pork imports. The following is a statement from National Pork Producers Council President David Herring, a pork producer from Lillington, N.C.:
“If media reports are accurate, this is a most welcome development. The Chinese have placed punitive tariffs of 60% on most U.S. pork products, bringing the effective tariff rate on most U.S. pork to 72%.
“According to Iowa State University economist Dermot Hayes, the Chinese retaliation on U.S. pork has shaved $8 off the price of every hog sold in the United States for well over a year. Most of our competitors face only a 12% tariff on their pork exports to China. Pork is somewhat unique given that it is the most important protein consumed in China, accounting for a significant part of the consumer price index.
“Additionally, pork is in short supply in China because African swine fever has ravaged the Chinese hog herd and significantly reduced the production of pork. When you consider that China is the largest producer and consumer of pork in the world, the importance of this market to U.S. pork producers is clear. U.S. pork exports could single handedly make a huge dent in the trade imbalance with China. We are hopeful that this apparent gesture of goodwill by China leads not only to more sales of U.S. pork, but that it contributes to a resolution of U.S.-China trade restrictions.”
Negotiators from the United States and China will meet face-to-face next month. Chinese officials told reporters Thursday the agreement was reached in a phone conversation this week.
China’s Vice Premier visited over the phone Thursday morning with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer. Following the call, China announced negotiators plan to travel to Washington next month for high-level talks, and will continue consultations through September ahead of the meeting in October.
The announcement from China comes as President Trump told reporters in the Oval Office this week that China wants to reach a deal with the United States. The U.S. Trade Representative’s office has yet to confirm the planned October meeting, but did say discussions will take place in the coming weeks.
The tit-for-tat trade war with China has dropped U.S. ag exports to China from more than $20 billion in 2017, to $9 billion last year. A breakthrough in negotiations would be welcome news for agriculture.
President Donald Trump claims China is ready to return to the negotiating table, but China says they don’t know who the President talked to over the weekend.
A spokesperson for China’s Foreign Ministry told reporters “I am not aware of the phone calls over the weekend.” Trump claims Chinese officials called top U.S. trade officials to say, “let’s get back to the table.” However, China refutes the claim, and hopes the U.S. will “remain calm, return to reason, and immediately stop its wrong approach,” referring to the trade war escalation and Trump’s order against U.S. companies doing business in China.
However, the order met push back from the stock market and the U.S. business sector. China replied, “We hope the U.S. will heed the views from various sectors, calculate its gains and losses, and come to prudent rather than hot-headed decisions.” Over the phone negotiations were set to resume this week and Chinese officials are scheduled to meet in Washington with the U.S. for negotiations next month.
The world’s biggest pork consumer bought just over 10,000 tons of U.S. pork sometime between August 2-8. Reuters says that was the biggest purchase of American pork in almost two months.
The pork purchase is due for shipment this year as African Swine Fever continues to ravage the world’s biggest pork herd. The Chinese Commerce Ministry had said on August 5 that Chinese companies stopped buying U.S. farm commodities after yet another escalation in the trade war with America. Reuters says it’s not clear if the pork was bought before or after the August announcement. Analysts say the sales are seen as a sign that China needs meat from the United States to help offset the death loss of millions of pigs.
Steve Meyer is an economist with the commodity firm Kerns and Associates, who says, “It’s a new booking, which is positive.” China’s duty on American pork sits at a whopping 62 percent. President Trump backed off last week on part of his plan for 10 percent tariffs on all remaining Chinese imports starting on September 1. Late last week, China says it would counter the latest U.S. tariffs.
Tariffs are now costing the U.S. up to $6 billion a month, according to Tariffs Hurt the Heartland. The trade group says American businesses and consumers paid $6 billion in tariffs in June 2019, one of the highest tariffed months in U.S. history.
The June figure is up 2.5 billion, or 74 percent, from the same month last year. The data, compiled from the U.S. Census Bureau, is the first look at the impact of the escalation of tariffs on $200 billion of Chinese goods from 10 to 25 percent in May. The data comes days after President Trump announced yet another round of tariffs on an additional $300 billion in goods, which are set to take effect September 1. China responded to by stopping purchases of U.S. ag products.
Tariffs Hurt the Heartland spokesman Jonathan Gold says the tariffs are “costing American jobs, raising prices, hurting farmers and derailing U.S. economic growth.” In total, American taxpayers have paid over $27 billion in extra import tariffs since the trade war began.