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Dairy Tracking Key China Trade Developments

March 4, 2020

NMPF, the U.S. Dairy Export Council (USDEC) and dairy allies in China are working both to solidify gains represented in the “Phase One” China trade deal that went into effect Feb. 14 and to advance beyond them by fostering the removal of all retaliatory tariffs on dairy.

The agreement, which includes pledges from China to step up its buys of U.S. agricultural goods, holds the potential for U.S. dairy exports to expand. However, still-in-place tariffs may curb those purchases relative to other farm products.

The tariff front saw a positive development March 2 when China’s Tariff Committee of the State Council opened a process for companies registered to conduct business in China to apply for exemptions from retaliatory tariffs still in effect. The process, intended to help fulfill China’s purchasing agreements under Phase One, may boost sales of skim milk powder, whey products and lactose, all among the products for which China specifically invited tariff exemption. Applications for additional products are permissible as well, according to China’s announcement of the program.

In addition to their efforts to lift retaliatory tariffs, NMPF, USDEC and the Consortium for Common Food Names (CCFN), sent a letter Jan. 27 to Ambassador Lighthizer and Secretary Perdue expressing support for the gains made in the China Phase One deal while noting the need to hold China accountable for its commitments made on facilities audits and listings, product registrations, and common food names.

The U.S. Trade Representative has established a Bilateral Evaluation and Dispute Resolution Office to oversee China’s compliance with the agreement. NMPF and USDEC are also actively monitoring China’s adherence to its Phase One commitments as coordinated enforcement efforts between the dairy industry and government partners will be key to ensuring that China upholds its trade obligations.