By Nick Giordano, NPPC
China is the world’s largest producer and consumer of pork and, until recently, it only imported a relatively small percentage of its consumption. But China has been ravaged by African swine fever (ASF), with approximately half of its hog production wiped out. Unfortunately, because of trade disputes with the U.S., China has placed punitive tariffs of 60% on U.S. pork, bringing the total tariff on U.S. pork to 72%.
NPPC is advocating for the elimination of all tariffs on U.S. pork for a five-year period so that our producers can capitalize on the unprecedented sales opportunity in China because of ASF. According to Iowa State University Economist Dermot Hayes, five years of zero-tariff market access for U.S. pork in China would: (1) reduce the overall U.S. trade deficit with China by nearly 6%; (2) provide China with an ample supply of safe, high quality U.S. pork, enabling it to better manage food price inflation; (3) more than double U.S. pork production; and (4) generate 184,000 new U.S. jobs.
NPPC recently launched a digital campaign to highlight how the elimination of tariffs on U.S. pork can meet important objectives of both nations. Zero-tariff access for U.S. pork to China will slash the U.S. trade deficit with China, satisfying an important U.S. objective, while eliminating tariffs on U.S. pork will better position China to manage food price inflation.
According to Hayes’ analysis, U.S. pork sales would more than double, generating $24.5 billion in new sales over a 10-year period if China eliminates tariffs on U.S. pork. But if China continues to slap punitive tariffs on U.S. pork, we will lose sales to competitors in Brazil, Canada, Europe and other nations who are not subject to punitive tariffs.
U.S. pork producers have already lost an enormous opportunity as a result of the punitive Chinese tariffs. While U.S. pork sales to China have increased sharply in recent months, the clear and unequivocal maxim going forward is that U.S. pork sales to China will depend on the tariff level. Five years of zero tariffs for U.S. producers will open the floodgates. But the higher the tariff, the more we are disadvantaged against competitors and the less we will sell. At a 72% tariff, we will be stuck watching as our competitors expand production and take what should be ours.
China needs a safe supply of pork and U.S. producers are eager to help fill the supply gap. But we can’t compete and win with a 72% tariff. The punitive tariffs need to be lifted, allowing U.S. pork producers to fully capitalize on this tremendous export opportunity.
For more information about NPPC’s digital campaign, visit http://nppc.org/issues/issue/chinatradegap/.
Nick Giordano serves as vice president and counsel, global government affairs for NPPC. He leads NPPC’s Washington, D.C. office and is involved in all aspects of policy issues as they impact the interests of U.S. pork producers.
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