Sino-U.S. trade relations are once again strained, and the outbreak of trade wars or will be favorable for domestic hog

By CnAgri2018-06-08 10:06:29 Print On May 19, China and the United States initially reached a consensus that they would not fight a trade war. On May 29, the White House issued a statement that it will impose a 25% tariff on $50 billion of Chinese goods, and the final list of imports will be announced on June 15. This news means that the eased Sino-US trade relations are once again tense, so if according to the previous countermeasures to impose a 25% import duty on the US pork, what impact will it have on the domestic pork market?
U.S. pork has little influence on the Chinese market, but it has a certain influence on the U.S. pork market.
According to China Customs data, China imported 1.216 million tons of pork in 2017, which accounted for 2.3% of the total domestic pork production. Of that, 166,000 tons of pork was imported from the United States, accounting for 0.3% of the total domestic production. It can be seen that U.S. pork has less impact on China’s domestic pork market.
According to the USDA data, the US exported 2.589 million tons of pork in 2017, which accounted for 22.1% of the total pork production in the United States. Of that, 166,000 tons of pork was exported to China, accounting for 1.4% of the total US production. Relatively speaking, the amount of pork exported to China by the United States has a greater influence on the local market than on the Chinese market.
In general, the outcome of the trade war is a double loss. From the point of view of the quantity of U.S. pork exported to China, the impact on the Chinese market is relatively small, so the increase of tariffs on pork will not have a substantial impact on pig-related companies in China Mainland.
On the contrary, after the increase of tariffs, price advantage of U.S. pork will be insignificant, and the decline in imports of pork and hog entrails will help ease the sales pressure of domestic pork.
Therefore, if the trade war between China and the United States erupted, in the short term, it would benefit domestic pig prices. However, we believe that this may be the strategy of the US side, which is conducive to enhancing the weight of subsequent negotiations. The possibility of a trade war between China and the United States is less likely.