US Meat Exports Face Uncertain Future as Licenses Expire in China

The licenses for U.S. meatpackers to export to China are expiring imminently, risking $3 billion in trade. Analysts suggest this may not be an administrative glitch but a deliberate strategy amidst trade tensions, possibly benefiting Australia’s cattle producers as they could fill the gap left by U.S. exports.

Currently, the licenses permitting hundreds of U.S. meatpackers to export meat to China are set to expire very soon, jeopardizing approximately $3 billion in U.S. beef, pork, and chicken trade with China. If the licenses are not renewed, the ramifications could be significant for U.S. exporters.

Analyst Brett Stuart has indicated that U.S. beef, dairy, pork, and poultry exporters are at risk, highlighting that some have already seen their registrations lapse. Furthermore, he noted a troubling lack of response from China Customs regarding rectifying these lapsing registrations. It appears that these export licenses, which are typically auto-renewed every five years, are not doing so as expected.

As a consequence, the meat industry may face drastic measures, with Stuart stressing that the U.S. could wake up to find itself having lost access to the $3 billion meat export market to China. He speculated whether this situation reflects a mere glitch or a deeper political strategy designed to exert pressure.

Stuart articulated concerns that existing retaliatory tariffs imposed by China on U.S. meat, combined with their passive non-response to renewal requests, might suggest a planned approach to excluding U.S. meat exports. He stated, “The entire U.S. meat industry is kicked out of China on Monday” as a potential outcome unless circumstances change.

On the other hand, Australia could benefit from these trade tensions. Stuart mentioned that last year, the United States exported 170,000 tonnes of beef to China, which may have to seek new markets, leaving Australia as the primary source of grain-fed beef. Reports show an increase in orders for Australian grain-fed beef as Chinese importers seek to secure alternative supply lines.

In summary, the looming expiration of U.S. meat export licenses has created significant uncertainty within the industry, threatening $3 billion in trade with China. Analysts suggest that while the situation may be dire for U.S. exporters, Australia stands to gain from this development, potentially positioning itself as the sole provider of grain-fed beef to China amidst escalating trade tensions.

Original Source: www.abc.net.au