Today the United States issued a list of Chinese products (totaling $50 billion) which will be subject to tariffs of 25% as of July 6th. The U.S. tariffs are being imposed in light of China’s actions on intellectual property and other issues.
In response, China released their own retaliation list (Google translation here). USDEC is in the process of translating the Chinese statement; however based on our initial analysis of the document, the following appears to be the case:
- China intends to apply additional retaliatory tariffs of 25% on a lengthy list of products contained in the announcement starting on July 6th.
- China’s product list includes the following dairy tariff lines which cover all Chapter 4 dairy products (e.g. fluid milk, cream, milk powder, yogurt, whey, butter/butterfat/butteroil, cheese, etc):
- 04011000, 04012000, 04014000, 04015000, 04021000, 04022100, 04022900, 04029100, 04029900, 04031000, 04039000, 04041000, 04049000, 04051000, 04052000, 04059000, 04061000, 04062000, 04063000, 04064000, 04069000
We are working to identify how products already en-route will be impacted and to confirm our understanding that the 25% rates are in addition to the existing WTO rates. China’s current WTO rates can be found in USDEC’s Export Guide, which has not yet been updated to account for today’s announcement: https://resources.usdec.org/DairyExportGuide/Volume1.cfm.
- China is our fourth largest dairy export market accounting for $577 million in sales in 2017. Sales that year increased 49 percent, making these new tariffs all the more concerning.
- The Office of the U.S. Trade Representative said the new tariffs on Chinese imports are part of the U.S. response to China’s unfair trading practices related to American technology and intellectual property.
- USDEC supports the Administration’s efforts to safeguard American IP across the globe. However, we are urging the White House to pursue an enforcement path that does not jeopardize American dairy farms and dairy manufacturing jobs, especially given the challenging situation we already face in Mexico.
DairyBusiness Initial Review:
The China schedule appears to include:
- Fat content does not exceed 1% of the non-concentrated milk and cream
- Non-fat content of 1-6% concentrated unsweetened Milk and cream
- 6-10% non-fat content of the concentrated milk and cream unsweetened
- Fat content of more than 10%, not concentrated unsweetened milk and cream
- 1.5% fat Milk, cream
- Fat content> 1.5% unsweetened Cream Milk
- Fat content> 1.5% Cream Milk, sugar
- Milk, cream and sweetened concentrated
- Concentrated and Sweetened Milk, butter
- Other milk products containing natural Butter
- milk sauce
- Other extracted from the milk fat and oils
- Fresh cheese, curd
- Grated or powdered cheese
- Other processed cheese
- Blue cheese, cheese with texture
- Other cheese