This week The Hill is carrying an OpEd by Thomas Parsons, Vet Med professor, and Scott Moore, China Program Director at the University of Pennsylvania regarding livestock disease dangers. The note is in response to the recent “animal apocalypse” unfolding in China as African Swine Fever has devastated its swine population and likely killed more than 25% of the world’s hogs.
However, as stark as those data are, the authors argue that the real costs of this calamity go much deeper. Perhaps more than any other commodity, pork’s role is “as much political and environmental” as it is economic. And the writers argue that even if Washington and Beijing manage to end their commercial conflict, “they’ll need to find new ways to cooperate to prevent threats like ASF from reaching the U.S.”
For both China and the U.S., “pork stands out among the hundreds of thousands of commodities that make up nearly $700 billion worth of annual trade for its political importance.” In the U.S., this significance comes by way of the political clout of hog producers since a “very large share of the top pork counties were part of the President’s base in 2016” — a political link that remains strong despite the negative consequences of the trade war.
In China, pork consumption is deeply embedded in the Middle Kingdom’s culture and cuisine. China is both the world’s largest producer and consumer of pork, and pork accounts for more than 75% of its meat consumption, especially during holidays, festivals, and formal banquets.
Given this importance, politicians have grown nervous as the trade war devastates “what should have been a classic gains-from-trade scenario for American producers and Chinese consumers,” the writers say.
In fact, Chinese pork prices have skyrocketed, the authors say and now are four times their U.S. level. Ordinarily, this would present a great opportunity for America’s highly efficient pork producers to fill the gap.
But because Beijing responded to the administration’s tariffs by imposing duties of their own on U.S. ag exports, American producers “have largely have been priced out of the Chinese market,” leaving other countries to fill the void. USDA pegs the loss to U.S. producers at $860 million while the National Pork Producers Council says it is “over $1 billon.”
So far, U.S. producers are attempting to compensate by expanding into markets like South Korea, but export opportunities there are only a fraction of those in China.
China’s leaders, meanwhile, are clearly concerned about the long-term impact of both ASF and the trade war. Recently, Beijing has agreed to buy large quantities of U.S. agriculture products, including pork, as part of a “phase one” trade deal. However, the writers say it would be a mistake to read too much into this move since similar Chinese overtures in the past have never been fully implemented and Beijing is already “starting to waiver on its most recent commitment.”
When it comes to the trade war at large, Beijing has shown no signs of willingness to throw in the towel, The OpEd writers say in spite of short-term concessions on pork and other agricultural imports. It is making long-term investments in self-sufficiency in swine production — signaling that for pork, like other commodities, its long-term objective is not to increase imports but rather to phase them out altogether.
Meanwhile, the fallout from the combined effects of ASF and the trade war continue to imperil the pork industry “on both sides of the Pacific.” The Chinese government is working to incentivize commercial swine production by both low cost loans and reduced environmental regulations.
But losses from ASF are so great that even after the deployment of their strategic pork reserve, China will be faced with insufficient pork supplies and high consumer pork prices, possibly for years to come. Meanwhile, in the U.S., the pork industry is still reeling from the billion dollars of lost income in previous years. Volatility from on-again/off-again Chinese pork purchases driven by the ebbs and flows of the trade war has confounded strategic planning by individual businesses.
ASF has now spread from China to nine neighboring countries and thus is a lingering fear among many experts that it’s not a question of whether ASF reaches American shores, but when.
Pork, though just one of the many items that make up China’s trade with the United States, tells the story of the two countries’ political and economic interdependence more poignantly than any other, the writers think.
No other commodity so vividly illustrates the trade war’s economic, political, and environmental costs — or the reality that, whatever the state of tensions between Washington and Beijing, the fate of farmers in both the U.S. and China is fundamentally shared.
So, we will see. In spite of basic self-sufficiency policies, in recent years China has moved to increase its dependence on some imports, including vital products like vegetable oil seeds — and they might well do something similar with pork, an argument against continued heavy U.S. dependence on tariffs. This tends to argue for increasingly sensitive and detailed trade negotiations, as a number of U.S. groups are now arguing, Washington Insider believes.
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