China tariff exemptions boost U.S. poultry shipments

By Tom Polansek

CHICAGO (Reuters) – U.S. chicken products are entering China without retaliatory tariffs after Beijing made poultry eligible for exemptions to the extra duties, shippers and an industry group said on Thursday.

The additional tariff relief may help China follow through on pledges to significantly increase purchases of American agricultural goods as part of an initial trade deal signed in January. U.S. chicken company Tyson Foods Inc (N:) said it had already seen chicken shipments rise as a result.

China said last month it would grant exemptions on retaliatory duties to 696 U.S. goods as part of efforts to ease the trade war between the world’s two largest economies.

U.S. poultry was not eligible for exemptions until this week, said Jim Sumner, president of the trade group USA Poultry and Egg Export Council. China-based importers have applied for and received exemptions from the 30% retaliatory duty, which Beijing recently reduced from 35%, he said.

“We now have product getting in without any retaliatory tariffs,” Sumner said.

Global meat and poultry suppliers are competing for sales to China, where an outbreak of the fatal pig disease African swine fever has shrunk the hog herd by more than 40% and raised the need for imports.

Beijing lifted a nearly five-year ban on imports of U.S. poultry meat in November, a move the U.S. Trade Representative said at the time would lead to more than $1 billion in annual shipments to China.

“We are now on a level playing field with the other poultry suppliers to China,” Sumner said. “They knew that it was not in their best interest to have this duty, which could have impeded imports.”

Tyson Foods said it was encouraged by China’s decision to provide tariff exemptions on chicken.

“Many of our customers in China have already qualified, boosting our chicken shipments there,” Tyson Foods said in an email.

Sanderson Farms Inc (O:) said last week that since the ban was lifted, it had shipped to China or received customer orders in China for about 18 million pounds of chicken products. That included 137 loads of dark meat and 283 loads of chicken feet, Chief Executive Joe Sanderson said on an earnings call.

Logistics problems linked to the outbreak of coronavirus in China have eased after temporarily disrupting meat shipments.

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