Tag Archives: Trump Asia Trip

Get Along Little Dogie, but not to Asian Markets

The President was pleased to tell anyone watching his Twitter feed that his trip to Asia was a Wonderful, Biggest Ever In History, Success.  Not. So. Fast.  Especially “not so fast” if a person is in the cattle business, and most of the cattle business in Nevada is in the northern part of the State:

“Range livestock production is predominate in Nevada with well over half of the farms raising cattle or sheep. The highest concentrations of cattle are in the northern part of the State. Cow-calf operations are most common type of operation and Elko county ranks among the leading counties in the Nation in number of beef cows. “

So, when the administration announced it was pulling out of the Trans Pacific Partnership the rug got pulled from under any notions that Asian nations would increase their importation of beef from the US.  The Japanese and Chinese governments announced their own policies, and neither was amenable to imports from America:

“Japan announced it was increasing its tariff on imports of frozen beef from 38% to 50% until next April. The decision affects all countries with which it does not have a free trade agreement. That would include the United States.

Second, according to reporting that appears to be exclusive to Politico, the agreement the Trump administration made with China required that the beef be free of artificial growth hormones or additives that make the meat leaner. Unfortunately, most of the U.S. cattle industry relies on the hormones or the additives or both, according to the reporting.”

When Trump touted “America First” that translated to “America out of the market” as the administration bumbled through bilateral agreements.  The result was predictable, US beef imports to Japan dropped 26% from last year. [FBN]  Those who advocated bi-lateral, as opposed to multi-national agreements, argued that the former would allow negotiators to directly address issues.  Obviously, that didn’t happen.  Meanwhile, back in Beijing:

“The role of China in global beef markets has evolved rapidly in recent years.  Despite being a large beef producing and consuming nation for many years, China has never been a player in global beef markets until recently.  For many years China neither imported nor exported much beef. However, since 2012, growing beef consumption has resulted in a rapid increase in beef imports as consumption outpaced beef production in China.  China emerged as the second largest beef importing country in 2016.  Major beef suppliers to China in 2016 were Brazil (29 percent of total Chinese imports); Uruguay (27 percent); Australia (19 percent); New Zealand (12 percent) and Argentina (9 percent).   In 2017, Chinese beef imports are projected at 950 thousand metric tons, up 17 percent from 2016.”

So, can we expect progress on opening Chinese markets to American grown beef as a result of this recent trip to Asia?  Probably not.

“Business deals announced by the president are tentative agreements that may not be fulfilled. And while the president railed against what he viewed as systemic flaws in the U.S. trading relationship with its Asian partners, he neither publicly requested nor received specific assurances to address issues like market access and intellectual property theft.”

The beneficiaries of this administration policy appears to be the Australians.  An agreement reached last March allowed greater access to Australian imports of frozen beef: “The joint statement between China and Australia means the number of meat processors permitted to export chilled beef to China will increase from 10 to 36, with another 15 expected to have pending approvals fast-tracked.” [AuBC]  The applied tariff on Australian beef is 8.4% with an elimination of the 12% to 25% tariffs eliminated by 2024. [MLA.au]

The bottom line seems to be for all the boasting and bombast from the White House twitter line, the Asian trip produced ZIP/Zero for western US cattle producers, including those in Nevada.

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Filed under Economy, Nevada economy, Politics