China’s African swine fever outbreak and US trade war combine to create perfect storm for Chinese economy
- Beijing placed 50-70 per cent tariffs on US pork imports to punish farm states that support US President Donald Trump
- But with African swine fever threatening 200 million pigs, the biggest consumer of pork in the world is facing a shortage as demand and prices rise
When China levied additional tariffs on pork from the United States last year, Zhu Mengzhou, a manager of an imported food distributor in Guangzhou, was one of many traders who stopped buying it.
“Unless the tariffs are adjusted, the cost is too high for us,” Zhu said.
Even as an outbreak of African swine fever threatens to decimate China’s most important meat market, Zhu cannot afford to resume US purchases due to two rounds of trade war tariffs which added a total of 50 per cent to import duties.
For some US pork products, Chinese buyers have to pay duties up to 70 per cent just to get them past customs.
Zhu and many other pork traders in China – as well as the US – are watching anxiously as negotiators from both sides iron out the finer points of a deal to end the trade war, potentially scaling back pork tariffs in the process.
China is desperately struggling to fill a market gap that could see as many as 200 million pigs lost to disease or slaughter, according to a worst-case scenario study from Rabobank, with African swine fever ripping through all 31 of its autonomous regions and provinces, from Tibet in the west to the tropical island of Hainan in the south, within just nine months.