Irish farmers could reap benefit of global trade war
THE US and China trade war could provide opportunities for Irish pig farmers and fruit producers looking to expand into the Chinese market, according to the Irish agri-food sector.
Yesterday, China hiked tariffs by up to 25pc on 128 US goods, which included everything from frozen pork and wine to certain fruits and nuts.
China’s new tariffs follow weeks of heated rhetoric and threats between the world’s two biggest economies.
The measures, which came with a warning from state media that Beijing is prepared to “show its strength” towards the US, could seriously harm the livelihoods of American farmers, a group which is seen as being part of President Donald Trump’s core support.
The announcement came in direct response to US duties on imports of aluminium and steel from China.
Mr Trump’s tariffs are partly a response to complaints that Beijing steals or pressures foreign companies to hand over technology. China’s Ministry of Commerce (MOFCOM) said in a statement that it was suspending its obligations to the World Trade Organisation (WTO) and that the new tariffs would start yesterday.
The White House immediately responded, accusing China of distorting global markets and said that the country should not target “fairly traded US exports”.
The American pork industry sent more than a billion dollars in products, making China the number three market for US pork.
Irish exporters said there could an opportunity to now gain ground in China.
According to Bord Bia’s latest figures, Irish pig meat exports to China fell by 14pc to €93m in 2017.
But those in the agri-food sector say Ireland’s exporting position could be improved in both markets due to the current trade issues.
Irish Farmers’ Association (IFA) pig chairman Tom Hogan told the Irish Independent that the trade debacle could improve the competitiveness of Irish pig meat. “China has developed into a very important market for Irish pigmeat since the Russian ban,” he said.
“The cost of production of US pigmeat is significantly below that in Ireland and the EU due to our welfare requirements and higher feed costs,” Mr Hogan added.
“The US is a significant exporter of pigmeat to China and if tariffs on US pork improve the competitiveness of Irish pigmeat in the market, it would be positive for Irish pig farmers,” he said.
Mr Hogan also said he foresees the trade war between China and the US having a positive effect on Irish pig prices.
Meanwhile, IFA horticulture chair Gerard Reilly added that the tariffs placed on US fruit imported in to China also signals potential for Irish fruit products in the Asian market.
“With Brexit, any alternative market is a good advantage to producers and farmers,” he said.
“The EU and home market is very crowded, so this poses huge potential for us and with our Origin Green image we have an excellent reputation for quality produce in Ireland.”
US stocks fell on the back of the Chinese announcement, but now the focus has shifted to the next move from the US with expected announcements on taxes on imports of technological goods from China this week.
As much as $60bn-worth (€49bn) of Chinese-made tech imports could be affected by new levies seeking to combat this threat.
“While the current trade dispute has unique elements such as cyber-theft and national security concerns, it also has an economic logic, one that is neither novel nor unique to the US-China relationship,” said Goldman Sachs analysts David Mericle and Daan Struyven, referring to previous international spats between firms which become national champions.
“In part for this reason, the dispute is unlikely to be fully resolved any time soon,” they added.