Will a trade truce with China be the start of pork producers' recovery?


By Jessi Devenyns, FoodDive

Dec. 5, 2018


Dive Brief:


·         After a meeting between President Donald Trump and China’s President Xi Jinping, a truce in the trade dispute between the U.S. and China has been struck, and additional tariffs raising the level to 25% will not be implemented on Jan. 1, as announced earlier this year.

·         However, the current status quo remains, and tariffs will still be 10%, according to a statement issued by the White House. China will also agree to purchase "a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product" from the U.S., the White House announced.

·         At the same time, last week a modernized version of NAFTA has been signed into law. Known as the United States-Mexico-Canada trade agreement (USMCA), it safeguards the core tenets of NAFTA while also representing a step toward preserving duty-free access to two critical foreign markets for U.S. meat and poultry.


Dive Insight:


Pork producers have gone hog wild over the news that the U.S. and China have struck a trade truce. Not only are there not going to be additional tariffs at the beginning of 2019, but China has agreed to purchase a substantial amount of U.S. products from a variety of industries in order to equalize the trade imbalance. Analysts believe a large chunk of these purchases could be made from pork producers.


Currently, China is facing a pig health crisis caused by African Swine Fever, which is forcing them to slaughter domestic pigs and import a good portion of their pork. As one of the world’s biggest markets for pork, it is only natural that they would reach out to one of the world’s biggest pork-producing nations: the United States.


Despite positive signals — the Wall Street Journal reports that Chinese pork prices are up 24% since May, whereas hog prices in the U.S. have been on the rise since mid-October in anticipation of increased demand — there are no signs that current tariffs will be removed any time soon.


China implemented a 25% retaliatory tariff on U.S. pork products on April 1, which remains...


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