April 2, 2018

Australian farmers benefit from Trump's US versus China trade war

Comment: China, by its imposition of agricultural tariffs on the US, but not on Australia, can drive a type of economic wedge between important US and Australian market interests. While (loyal to the US) Australian politicians would be reluctant to say it out loud Australian farmers are to benefit greatly from Trump's US versus China trade war. What is an increased Chinese tariff led market loss for American farmers is a market gain for Australian farmers who face no such tariff increases.

News: On April 2, 2018 comes the happy tiding: "China says it is rolling out new tariffs on meat, fruit, wine and other products from the United States as retaliation against taxes approved by US President Donald Trump on imported steel and aluminium."

[The China imposed tariffs] are in response to tariffs of 10 per cent on aluminium and 25 per cent on steel that have also angered US allies. Trump, however, has temporarily suspended [any aluminium or steel tariffs on] the European Union as well as any on] Argentina, Australia, Brazil, Canada, Mexico and South Korea.

Comment: So Australia has not yet been caught in any trade war downsides, yet. Australia has not been hit with Trump's aluminium or steel tariffs yet. Fortunately Australia is already a heavy exporter of meat [see below], fruit and wine to China. So these Australian agricultural exports to China merely need to increase.

Table of Australian agricultural exports to China 1995 to 2011. The Table is courtesy National Australia Bank (NAB) April 22, 2015 which reports:  “...Chinese demand for premium and high quality Australian food products, such as beef and other meat, has increased dramatically in the last two years. In 2013, Australian exports in beef to China increased nearly four times, oil seeds five times, and meat exports doubled year-on-year...

Pete

2 comments:

Anonymous said...

Darker days ahead for US agriculture and meat products. Even without trade conflicts, the US ai already facing drought in the mid west and west, fast erosion of its top soil and a drying Colorado river to boost (just like the Yellow river, this is another big river that no longer can flow out to sea). Throw in disappearing agricultural land in developing countries (China being just one of many) and a lot more mouths to feed in decades to come, Australian (or Brazilian, Argentinian) agricultural and meat exports should have a bright future.
KQN

Peter Coates said...

Thanks KQN

A major worry in Australia is that its agricultural, energy and mineral resources will become so valuable to China (with depleted resources) that the new superpower of China will take, or Finlandize [1], Australia. Australia is a long way from isolationist US.

[1] Finlandization is the process by which one powerful country makes a smaller country abide by the former's foreign policy rules, while allowing it to keep its nominal independence and its own political system. The term means "to become like Finland" referring to the influence of the Soviet Union on Finland's policies during the Cold War. https://en.wikipedia.org/wiki/Finlandization

Regards

Pete