As the U.S.-China trade conflict drags on, the share of U.S. beef in China is shrinking. Australian beef, which is similar in quality but cheaper, is quickly filling the gap.
On the 29th (local time), Reuters reported, "Since President Donald Trump returned to the White House, Australian beef has been replacing U.S. beef," adding, "Hundreds of millions of dollars that flowed into the U.S. beef industry in recent years are now going into Australians' pockets."
According to China's trade data, exports of U.S. beef to China fell about 93% from $118 million (about 165.3 billion won) in Jul. last year to $8.1 million (11.3 billion won) in Jul. this year. In Aug., they plunged about 92%, from $125 million (175.1 billion won) to $9.5 million (13.3 billion won). During Trump's first term, after the U.S. signed a U.S.-China trade agreement, it exported beef to China in large volumes.
The decline in U.S. beef exports has been heavily influenced by the U.S.-China trade conflict. In March, China did not renew export qualifications to China for about 1,000 U.S. meat companies, equivalent to about two-thirds of all registered firms. In China, food exporters must register with customs to be able to export.
Moreover, as China retaliated against U.S. tariffs by imposing a 125% retaliatory tariff, prices of U.S. beef rose sharply. Although both countries later cut tariffs by 115 percentage points (P) each, the price competitiveness of U.S. beef has already fallen far behind beef from other countries.
In the Chinese market, Australian beef is quickly filling the gap left by U.S. beef. Australia's beef exports to China had hovered around $140 million (about 196.1 billion won) per month over the past two years, but they surged to $221 million (about 309.5 billion won) in Jul. and $226 million (about 316.5 billion won) in Aug. As a result, during Apr.–Aug., U.S. beef exports to China fell by $388 million (543.4 billion won) from the recent two-year average, while Australia's exports increased by $313 million (438.3 billion won).
Reuters said, "Brazil, China's largest beef supplier, has also increased exports in recent months, but the biggest beneficiary of the U.S.-China trade conflict has been Australia," adding, "That's because Australia's grain-fed beef most closely resembles U.S. products." Australia's beef production has hit an all-time high, and prices have fallen sharply as a result.
The U.S. livestock industry is in a tight spot. China has been paying premium prices for cuts such as chuck roll, which are unpopular in the U.S., and that has been a major source of income for U.S. beef processors. U.S. Meat Export Federation Spokesperson Joe Schuele said, "We need to export products that do not receive much attention in the domestic market," adding that U.S.-China trade talks could solve this problem.
Some say that even if U.S.-China trade talks conclude smoothly, it will be hard for U.S. beef to significantly regain market share in China. Mac Dalgliesh of Australian consultancy Episode 3 noted, "Even if a trade agreement is signed, the U.S. will struggle for years to regain market share," adding, "U.S. beef has already lost market competitiveness."