NPPC Welcomes Phase-One Trade Deal with China; Urges Elimination of All Punitive Tariffs
WASHINGTON, D.C., January 15, 2020 – Today, President Trump signed the first phase of a trade deal with China that includes the purchase of $40 billion in agricultural products, including pork—by far the most significant protein consumed in China. National Pork Producers Council (NPPC) President David Herring and Board Member Craig Andersen were in attendance at today’s signing ceremony. Herring, a hog farmer from Lillington, N.C., issued the following statement:
“NPPC applauds the administration for its hard work in negotiating this deal. China is the world’s biggest producer and consumer of pork. However, the country’s hog supply has been ravaged by African swine fever — a disease affecting only pigs with no human health or food safety risks — resulting in a tremendous shortage of pork and mounting food price inflation. The U.S. is typically the largest pork exporting nation in the world and generally the lowest-cost producer in the world. We are ideally positioned to address this unprecedented sales opportunity for pork in China.
“While China’s phase one commitments are welcomed, U.S. pork exports continue to be suppressed because of the country’s 60 percent punitive tariffs. In order to fully capture the benefits of this deal, we need China to eliminate all tariffs on U.S. pork for at least five years. According to Iowa State University Economist Dermot Hayes, if U.S. pork gets unrestricted access to the Chinese market, it will reduce the overall U.S. trade deficit with China by nearly six percent, generate 184,000 new U.S. jobs and produce $24.5 billion in new pork exports all within the next decade. However, if the U.S. continues to face 60 percent punitive tariffs (and a cumulative tariff of 68 percent), while our competitor nations are assessed an 8 percent tariff, U.S. pork sales will be suppressed as China imports more pork from other nations.”
U.S. pork producers have been significantly harmed by trade retaliation from China, losing $8 per hog—or $1 billion on an annualized industry-wide basis, according to Dr. Hayes. U.S. pork producers need tariffs eliminated, helping China manage rampant food price inflation and ensuring America fully benefits from the phase one agreement.
“Pork is a litmus test for the phase one deal with China. The worst kept secret in the world is China’s serious shortage of pork and rampant food price inflation. If China is unwilling to drop its tariffs on U.S. pork, it’s difficult to envision the country meeting the $40 billion per year agriculture purchase commitment,” added Herring.