News trade war
China responds: tax on soy and pork
The announced import duties on US goods officially came into effect on Friday, July 6. With this, China is responding to sanctions that the United States (US) announced at an earlier stage. Once again, pork and soybeans play a key role.
The Chinese measures affect more than 500 American goods, worth $34 billion. This also includes a 25% levy on commodities such as soybeans and pork. The Chinese Ministry of Commerce said in a statement that China sees no other option than to respond in this way to the import duties imposed by the US. mid-June (worth $50 billion).
In fact, the levies are being imposed for the second time, after the government introduced measures in April. In the meantime, the levies suspended in an effort to settle the trade dispute. This failed. Meanwhile, US President Donald Trump is threatening further sanctions on imports of Chinese goods worth more than $500 billion. This is roughly equivalent to the amount the US imported of Chinese goods last year.
Pork prices to rise
Just like the American farmers Chinese consumers are likely to bear the brunt of the trade dispute, as the price of pork in China is likely to rise in the medium term, according to the Food and Agriculture Organization (FAO) in their forecast for the next 10 years. Soy is an important feed raw material for Chinese pig farming; Due to the imposed tariffs, the price of soy and sorghum in China has already risen.
China is by far the largest importer of soy in the world, importing probably 97 million tons this year, much of it (39%) coming from the US. This volume is now taxed at 25%. The import of american pork more expensive.
According to the FAO, the effect could not be too bad if China succeeds in importing pork from other countries. About 15% of the pork that China imports comes from the US, 60% is shipped from Europe and the rest comes from countries such as Canada and Brazil. In addition, China is trying to import more Brazilian soy.
Fallback options
In principle, China has some contingency options, although world trade flows are often cumbersome and not easy to bend. If the trade war is not reconciled in the medium term, shifts in trade flows are obvious. And the European pig sector may still benefit from this.
Wouter Job
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