It has been just over one year since China reopened to U.S. beef after an absence of nearly 14 years, but ongoing progress in the region is facing an even steeper challenge, according to the U.S. Meat Export Federation (USMEF). On June 16, China’s Ministry of Finance published a more definitive threat to impose an additional 25% retaliatory tariff on U.S. beef, which would raise the total import duty rate on U.S. beef to 37%.

USMEF said in the second half of 2017, following reopening of the market, U.S. beef exports to China totaled about 3,000 metric tons and were valued at $31 million. Through April of this year, exports were just under 2,300 mt and were valued at $21.3 million.

Joel Haggard, USMEF senior vice president for the Asia Pacific, said re-establishing a foothold in the world’s fastest-growing beef market has not been easy, and the threat of new duties has already had an effect on customer interest in U.S. beef, especially in the form of a noticeable slowdown from some of the industry's loyal restaurant and retail partners.

“I think owners and operators are nervous not just about supply reliability after additional 25% duties imposed and, of course, the pricing, but they’re also concerned about consumer response, especially if the war of words on the trade front escalates further,” he said.

USMEF expects that the volume of beef entering China will decline once the higher duty rate takes effect.

“U.S. exporters can’t be expected to lower prices by the extent of the duty because alternative markets exist for the U.S. beef products being shipped to China now, such as rib-eye, short ribs, chuck rolls, other steak cuts, etc. So, it really means we face the prospect of a significantly lower flow of beef coming into the marketplace here and very likely the loss of existing U.S. beef accounts ranging from Korean barbeque restaurants to steakhouses and supermarkets,” Haggard said. “This is all very regrettable, because the U.S. beef industry has put a lot of effort and capital into getting things kick-started over here over the last year.”

USMEF will continue to support loyal customers regardless of any larger turmoil and uncertainty as the group still believes China offers incredible long-term potential to the U.S. beef industry, he added.