It is a wild time right now, if you are trying to keep up with all that is going on in United States trade relations. China is front and center, even though NAFTA 2.0 is not finalized.
The international trade component of the beef industry already takes about 25-percent of U.S. production. Could China be the next market we expand or will a trade war wipe out the small sales the industry has worked so hard to get?
AUDIO: Profit Matters 5-23-18
Kent Bacus is director of international trade and market access for the National Cattlemen’s Beef Association (NCBA). Radio Oklahoma Network farm director Ron Hays caught up with Bacus to get the latest developments on the Chinese front when it comes to this tumultuous series of events that has been unfolding between the United States and China amid threats from each side of tariffs and fear of a trade war.
“What we’re hearing is that there’s been some progress in some of the discussions. I think it’s still very speculative at this point to see what the final result will be,” Bacus said. “I think the promising thing is we’re actually having conversations government to government because, keep in mind, China isn’t always the easiest country to work with.”
Bacus says Chinese officials have a litany of strict rules, regulations and bureaucracy to go through whenever decisions or negotiations are being discussed with other nations. The fact that both American and Chinese emissaries are travelling back and forth to meet face-to-face is a sign that perhaps an amicable solution can be hammered. He also warns, too, not to make the mistake that tariffs are off the table. Should negotiations fall apart, Bacus says we could be back to square one and beef potentially in the line of fire.
Despite threats of that happening, so far no movement has been made on enacting a retaliatory increase in Chinese tariffs on imported United States beef from 12 to 37-percent. Although, China is a comparatively small customer for the U.S. right now when it comes to beef. Bacus reminds us that China is quickly becoming one of the world’s largest importers of beef and is just starting its relationship with the United States beef industry, after more than a decade of having severed ties. He says there is a lot of potential for China to become a very important market for the U.S. in the future.
“It takes time to develop the supply chains, identify the customers and get product moving – and there’s more demand out there,” Bacus said. “We obviously want to be part of that success. We’ve committed to be a part of it and we’re going to see our sales continue to grow. China, either way, is going to be a good bet for us. It’s going to provide a good opportunity to expand into the Asian market.”