Chinese Tariffs Would Make U.S. Dairy Products Uncompetitive
If China follows through on its retaliatory tariffs on July 6, U.S. dairy products would no longer hold a price advantage over New Zealand or the European Union, reports the Dairy & Food Market Analyst.
If the tariffs go into effect, the following rates would apply: 37% on skim milk powder versus the current 10%; 27% on whey products versus the current 2%; 37% on fresh cheese versus 12%, and 33% on other types of cheeses (currently 8%).
China has been the Number 3 market for U.S. dairy exports behind Mexico and Canada since 2015. In 2017, China bought $577 million worth of dairy products from the United States, up from $386 million in 2016. Through the first four months of 2018, China has purchased just over $200 million worth of dairy products, putting it on pace to exceed 2017 purchases.
The July 6 tariff deadline is now less than two weeks ago. Some analysts believe cooler heads will prevail, and others believe the market reaction to the threat of tariffs is over-blown. Time will tell who is correct.