American businesses look set to gain better access to China’s domestic markets after concessions were made to avert a trade war between the two countries.
According to the Financial Times, US President Donald Trump and Xi Jinping, his Chinese counterpart, decided at their first meeting in Florida last week that China is willing to end a ban on US beef imports that has been in place since 2003. China also intends to buy more grains and other agricultural products from the US as it seeks to reduce tensions stemming from the $347bn annual trade surplus in goods that it enjoys with its biggest trading partner.
It will also offer financial concessions to the US.
The move comes after Trump openly slated China during his presidential campaign last year, threatening to slap tariffs on Chinese goods and declaring Beijing a currency manipulator.
If concluded, the deal would be welcomed by US financial services companies and beef exporters, who have long been expecting the Chinese to lift the ban on US beef that was introduced after a BSE scare in the US herd in 2003.
We need your leadership to resolve this unfair trade practice as soon as possible
China promised to end this ban more than six months ago and US beef exporters have been getting increasingly frustrated with their exclusion from the $2.6bn market. Late last month three trade groups representing the beef industry sent a letter to President Trump urging him to raise the restoration of US beef access to China at his summit meeting with President Xi Jinping in April.
“Last fall, China announced that it had lifted its ban on imports of US beef,” reads the letter from representatives of the National Cattleman’s Beef Association, US Meat Export Federation and North American Meat Institute, “but attempts since then to negotiate the technical terms of access have not been successful and we still are blocked from selling any US beef to Chinese consumers. We need your leadership to resolve this unfair trade practice as soon as possible.”
The representatives said they “believe that access to the large and growing Chinese beef market is essential to the future health of the US beef industry.” The Chinese market has also been closed to US poultry since 2015 after an outbreak of bird flu in the Midwest.
China to open to Irish beef
Meanwhile, after five long years, the Chinese market looks to be set to open to Irish beef. A senior Chinese minister is to visit Ireland on Easter Monday and anticipation is growing that Irish beef is about to clear the final hurdle for access to the Chinese market. China currently imports beef from Brazil, Australia, Argentina and Uruguay.
Per capita beef consumption in China increased 33% between 2012 and 2016, according to Bloomberg Intelligence, coinciding with a 38% increase in disposable income for urban Chinese households.