US dairy organisations applauded the first stage of a trade deal with China granting greater access to the Chinese market but want all remaining tariffs lifted to remove the uncertainty that has bogged the sector for more than a year.
This week, Donald Trump and Vice Premier Liu He signed off on a so-called phase one agreement, which includes a pledge by China to import US$200bn worth of US goods, including agricultural and dairy products such as infant formula. In return, the US administration has committed to halve existing tariffs on $120bn of Chinese imports from 15% to 7.5%.
However, some import taxes remain on both sides that were levied in stages from when the trade spat began in the summer of 2018 as Trump sought to narrow the US trade deficit with China to protect American business and industry.
The US Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) want to see more progress. They note how retaliatory tariffs imposed by China in a tit-for-tat response to Trump’s punitive measures caused a 47% slump in US dairy exports to the Asian country from December 2018 to the following November, “harming US farmers, manufacturers and exporters”.
Both organisations said China remains a valuable export market, where US dairy producers shipped $377m of products over the same period to November 2019. But they said how China will fulfil its commitment to “purchase large quantities of US agriculture products, including dairy”, remains to be seen.
Tom Vilsack, the president and chief executive of USDEC, said the “progress on regulatory restrictions and other non-tariff barriers hindering dairy trade is a positive step forward”.
He added in a statement issued in response to the trade deal: “These are important deliverables that USDEC has been pressing China for over the course of the last few years. We need to continue to work with our government, China’s government and our customers to finish the job by lifting the remaining Chinese retaliatory tariffs against our exports.”
USDEC and NMPF outlined the additional benefits to US dairy from the new pact: “Tackling facility and product registration steps that have stymied firms seeking to export to China for several years; improving the regulatory pathway for exports of infant formula and fluid milk (including extended shelf-life milk) to China; [and] creating new transparency and due process obligations regarding geographical indications and common food names.”
Randy Mooney, the chairman of NMPF who is also a dairy farmer himself, added: “America’s dairy farmers have been disproportionally harmed by China’s retaliatory tariffs, and we cannot ask our farmers to continue operating under this financial uncertainty. We appreciate the hard work invested by both the US and Chinese governments, but we urge China to swiftly lift all retaliatory tariffs against US dairy products and work with US suppliers to fulfil their purchasing commitment.”