Trade War: No Pain, No Gain

The trade war between the US and China has hit many industries. Meat and grains are amongst them, with supply of these commodities high and prices at a low. Lindi Botha spoke to Robert Preska and Jack Shao, executive members of the US Meat Export Federation, about the situation.

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HOW HAS THE TRADE WAR BETWEEN THE US AND CHINA AFFECTED THE US MEAT INDUSTRY?

ROBERT PRESKA (RP), TRADE MANAGER FOR WEST AFRICA AT LAMEX FOODS: Even before the tariff war, there were issues with China that inhibited trade, hence the current dispute. For example, due to mechanisation, the US can often process meat more cheaply than China can, and yet it has always been difficult to export processed meat to China, with regulations constantly changing. So this is something that’s part of the discussions on current tariffs. Recently, before the trade dispute, the Chinese also opened their market to beef exports from the US but again with numerous restrictions.

One of the repeated themes within the US Meat Export Federation (USMEF) over the last few decades is that we’re not getting the job done in terms of favourable trade deals. We’re always pushing to cut better deals and it would never have worked if we’d maintained the status quo in terms of trade with China. President Donald Trump has stepped in to bring reforms, but unfortunately his way of doing things has slowed down negotiations.

Grains and meats are two of the US’s biggest exports, so when we go into a trade war, those will be the first two items that are hit. In 2018, China was among the top five importers of US red meat, so it’s a significant chunk of our exports that are being affected. As an industry we can see what the goal is and we’re willing to take the punch. Unfortunately, we’re talking about farmers and their families here, and they’re struggling. If the situation is prolonged, we could significantly damage our agricultural production.

JACK SHAO (JS), SALES AND MARKETING MANAGER FOR HORMEL FOODS’ PORK DIVISION: