President Trump held meetings with key Asian leaders last week and announced progress in trade negotiations with several countries.
The Office of the U.S. Trade Representative (USTR) announced agreements on reciprocal trade with Malaysia and Cambodia and frameworks for agreements on reciprocal trade with Thailand and Vietnam. U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom notes that while Southeast Asia holds excellent growth potential for U.S. red meat, exporters face significant tariff and non-tariff barriers in the region. He explains that the agreements and frameworks announced by USTR represent progress in addressing these obstacles.
“Starting with Malaysia, the U.S. historically has faced numerous non-tariff trade barriers in the Malaysian region. We’re excited to see some of those barriers eliminated. U.S. pork has made strides in recent years in Malaysia, and there’s room for further growth. But I think the larger potential is for U.S. beef. A similar situation exists in Vietnam. There, the issue is tariff relief — lowering tariffs is going to be mandatory so we can compete on a level playing field. Hopefully, this is the first step in obtaining that relief.”
“Thailand is another country with prohibitively high tariff rates that have also been noted. Another, much smaller market is Cambodia, which is probably more of a beef market than a pork market opportunity, but the commitment there for duty-free access is also encouraging. It won’t be a big market, but honestly, in that whole Southeast Asia region, if you add all these markets together, it is significant.”
President Trump also met Chinese President Xi (ZHEE) Jinping. While the White House has not yet officially released details from the meeting, China reportedly agreed to resume imports of U.S. soybeans and made other commitments aimed at easing U.S.-China trade tensions. While this is encouraging, Halstrom emphasizes that U.S. pork exporters still need relief from China’s retaliatory tariffs. On the beef side, the U.S. industry not only needs tariff relief, but China must also renew registrations for U.S. beef plants – nearly all of which are currently ineligible for China.
“De-escalation of terrorists is essential, and it’s been holding back demand, obviously, on both pork and beef. A 57% duty on pork — you know, there’s business being done, but there’d be a lot more if we were back down to more reasonable levels. The same thing applies to beef. Of course, the real issue on beef really doesn’t have anything to do directly today with tariffs. It’s all about access on plant registration. That being said, there are some good signs outside of beef and pork. There’s resumption of trade in the soybean sector and some commitments going forward. So, I think the positive there, besides the impact for soybeans, is that it confirms ag exports are being looked at and prioritized.”
In another encouraging development, the U.S. paused for one year the additional fees recently imposed on Chinese-built-or-controlled vessels utilizing U.S. ports. China also agreed to pause the port fees imposed on U.S. ships in response. These fees increase costs for U.S. exporters and can negatively impact ocean carrier services.