Region/Countries: Asia, China Industry: Agriculture / Timber, Food and Beverage Date: August 2018

Why this is important to Wisconsin businesses: China's demand for imported food is increasing, and there is hope that tensions can be resolved so U.S. exports can help meet this demand.

In early August, China’s Ministry of Commerce released three announcements in response to the U.S. announcement of imposing additional tariffs of 25 percent on approximately $16 billion worth of imports  from China.  China announced it would impose its own 25 percent tariff rate on $16 billion of goods and commodity imports originating in the U.S., and this measure took effect on Aug. 23.

As one of the leading U.S. agricultural and manufacturing goods-producing states, Wisconsin has already been hurt by these ongoing U.S.-China trade frictions. One industry that has felt the effects is the ginseng industry, where Wisconsin ranks first in the U.S. for production. In addition, Wisconsin’s leading kidney bean processor says the company “has never felt such a strong sense of uncertainty.” What’s more, prices for U.S. milk products, which are highly dependent on export sales, dropped to $15 per 100 pounds because of trade frictions.

Despite all this, trade talks between China and the U.S. held in August in Washington signaled that at least China and the U.S. would stay in contact for future agreements.

Meanwhile, as living standards rise in China, China’s demand for imported food is increasing. In 2017, China imported $58.3 billion worth of food products and commodities, with a year-over-year growth rate of 25 percent. The U.S. remained the second-largest food supplier for China, and dairy, meat and oil products were among the most popular food imports in China, showing a steadily developing market for food imports in China and a strong opportunity for Wisconsin. Although the Chinese market for food products and commodities is growing larger and larger, but the future for U.S. exports into this market feels uncertain.