U.S. meat groups fear for market growth with China beef tariff hike

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Published: April 4, 2018

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Attendees at the 2017 Food and Hotel China trade show watch USMEF chefs prepare U.S. beef and pork. (USMEF.org)

Chicago | Reuters — China’s proposal on Wednesday for tariffs on U.S. beef confirmed the worst-case scenario for the U.S. cattle industry, trade groups said Wednesday, even as they remained hopeful the dispute could be resolved quickly.

China listed U.S. goods from soybeans to beef that could potentially incur a 25 per cent import tariff by the end of May if Washington carries out its threat to raise similar duties on $50 billion in Chinese goods (all figures US$).

A trade war would be a blow to the U.S. beef industry, which has seen an increase in year-over-year supplies even as prices have been falling for market-ready cattle, partly due to seasonal factors.

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In June 2017, U.S. beef exports returned to China after a 13-year absence over BSE worries. Some restrictions remain in place along with a 12 per cent duty on beef imports from the U.S., according to the U.S. Meat Export Federation (USMEF).

USMEF data showed U.S. beef exports to China after the market reopened in the second half of 2017 totaled 3,020 tonnes valued at $31 million.

Over the past nine months Chinese interest in U.S. beef has steadily gained momentum, said USMEF CEO Dan Halstrom in a statement. Additional tariffs on U.S. beef will risk opportunities for further growth, he said.

“USMEF is hopeful that this trade dispute can be resolved without China introducing additional obstacles for U.S. beef,” Halstrom said.

Kent Bacus, director of international trade and market access for the National Cattlemen’s Beef Association, also in a statement, said it was “unsettling” but not surprising to see U.S. beef targeted for retaliation.

“This is an inevitable outcome of any trade war. This is a battle between two governments, and the unfortunate casualties will be America’s cattlemen and women and our consumers in China,” said Bacus. The Trump administration has until the end of May to resolve the issue, Bacus added.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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