News

Analyst says China likely to buy less U.S. pork with or without tariffs

Financial analyst Russell Barton with Urner Barry tells Brownfield the new pork tariffs announced by China add up quickly.  “The existing export duties were 12% (and the) value-added tax was 13%.  These were already in place.  Then, you add the new duty of 25%, it stacks up to a total of 50% on exports to China of pork.  That’s significant.  That probably prohibits quite a bit of trade.”

But Barton says U.S. pork producers might not see much of a difference in sales to China, with or without the new tariffs. “The current situation is such that they are not necessarily relying on U.S. pork because their domestic supplies have grown, so regardless of these tariffs, we probably see imports of U.S. pork drop a little bit.”

Barton says China relies on a lot of pork, but China accounted for only about 7% of U.S. pork exports, totaling about 1.5% of the U.S. pork supply.  And, he says the European Union sells China more than double what the U.S. does.

Barton says the U.S. has seen slow expansion in other developing markets, and he’s encouraged by the recent trade agreement with South Korea.  Barton says Mexico and Japan continue to be solid markets for U.S. pork.