US China trade battle
US beef sector unsettled by threat of Chinese duties
Kent Bacus, director of international trade and market access for the National Cattlemen’s Beef Association (USA), followed up the Chinese announcement on 4 April of a potential 25% tariff on US beef exports with an immediate statement of concern. “It is unsettling to see American-produced beef listed as a target for retaliation,” he said.
“Sadly, we are not surprised, as this is an inevitable outcome of any trade war,” he added, referring to the US-China dispute as “a battle between two governments” and arguing that “the unfortunate casualties will be America’s cattlemen and women and our consumers in China.”
Noting that the Trump administration had given itself until the end of May to resolve this issue, and its complaints about alleged Chinese thefts of intellectual property that sparked this latest tit-for-tat announcement of threatened duties, Bacus said: “We believe in trade enforcement, but endless retaliation is not a good path forward for either side.”
The Chinese Government’s list of targeted duties includes fresh, chilled and frozen whole and half carcases; boned and boneless beef; and other frozen beef chops. It said the duties would cover products from both the USA and Canada, which trades freely with America under the North American Free Trade Agreement (NAFTA).
Despite this, Canadians are insisting that the Chinese action would not apply to them. Greg Colman of National Bank Financial, a Canadian investment bank, said the tariffs against US goods could increase demand for agriculture from other countries, including Canada.
“The likely outcome for Canadian farms is mildly positive, as the 25% tariff would enhance the competitiveness of farms in the rest of the world,” he wrote in a report.
“Certainly, we’re not included in these duties,” said Dennis Laycraft, executive vice-president of the Canadian Cattlemen’s Association. “There are provisions [in the Chinese announcement] that would prevent US producers from setting up shop in Canada just to avoid the tariff.”
He said that Canadian exports of beef to China had run as high as CA$250 million (US$195m) in some years, but last year totalled only CA$80m. “We’re expecting continual growth, but we’re somewhat constrained by our available supply.”
That being said, Laycraft argued that the trade dispute between the US and China was doing no one in the industry any good. “Any time you get duties this size it’s not good news for anybody,” he said. “Hopefully these issues get resolved and we can all get back to normal trade again.”
