Pork (and food) ...not Trump will end the tariff war
Posted on: July 11, 2019 at 08:16:23 CT
meatiger MU
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The Chinese love pork...so much that they raise and consume half of the world's pork. Many Chinese eat some sort of pork every day...Also...so much that the world's number one choice of meat is pork.
A devastating disease (African Swine Fever - ASF) hit them last year.
They have now lost at least half of their pig inventory due to poor biosecurity practices and a horrible response to the disease. It will take years (if ever to recover). with 25% of global pork production gone, there will be pork shortages. Guess who has the most surplus pork in the world....USA. Right now, there is a 62% tariff on pork going to China. with prices already high, that makes pork from USA very expensive. Right now, they are getting pork from other parts of the world, but as their frozen inventories decline, they will need USA sourced pork, and it will have to be cheap. They will have food inflation in China. It is almost approaching 7% this year, and it is just getting started. Food inflation/security is one of the main reasons governments get overthrown...see parts of Middle East/Africa not many years ago.
I think we will see some sort of deal in the next 6 months, with this being one of the background reasons, but both sides will claim some sort of credit for it.