Trump’s trade beef with China may backfire on meat

SHANGHAI: A key objective of President Donald Trump’s trade war is to pressure Beijing to ‘buy American’, but when it comes to millions of dollars of US meat imports, China may simply take its business elsewhere.

Beijing’s retaliatory tariffs on US pork and beef are making them prohibitively expensive and Chinese importers are simply turning to other sources, a trend expected in other sectors as well.

“When the US prices go so expensive after the duties... we will source from other origins,” said Zhang Lihui, Shanghai manager for global meat company PMI Foods.

“Like for beef, we will buy more from Australia, we will buy more from South America, and maybe a little bit more from Canada.”

PMI Foods has already ceased importing cuts of US pork meat into China after Beijing’s tariffs – imposed last month in response to Trump’s initial duties on Chinese goods – drove prices up.

Shifting trade patterns caused by the tariff battle will “definitely” benefit other countries at the US’s expense, Zhang said.

“The Chinese market will certainly look for replacements,” she said.

The outcome of the trade battle, spread across a range of sectors, remains hard to predict. But analysts warn that US exporters will lose significant China business.

The US exported around US$140 million worth of pork, beef and related by-products to China in June, before tariffs kicked in, according to the US Meat Export Federation, about 10 per cent of all US beef and pork exports.

China is clearly targeting imports of commodities such as meat, soybeans, wheat and petrochemicals that are easily replaced in the global market, said Julian EvansPritchard, a China economist with Capital Economics.

“That’s the idea of tariffs: you are trying to hurt the other side while not hurting yourself too much,” he said. — AFP