WASHINGTON, Dec. 13, 2019 —“Over the next decade, China represents a $23 billion market opportunity for U.S. dairy, and it is essential to our dairy producers and companies that we secure a trade deal with China that further levels the playing field for American dairy. We are confident that today’s announcement of a phase one deal between the United States and China puts on a path to rebalance the trade relationship between our two nations. According to the Office of the U.S. Trade Representative, the deal ensures that over the next two years, China will purchase $200 billion of U.S. goods and services, including purchases of U.S. agricultural products. In addition to purchases of U.S. dairy products, the deal includes commitments by the Chinese to reduce non-tariff barriers affecting dairy and infant formula—an important concession achieved by the U.S. administration.
“The dairy industry welcomes news of this phase one deal and the potential to begin negotiations on phase two that should further level the playing field for U.S. dairy. IDFA is hopeful that this deal signals the United States has embraced a market- and rules-based system of international trade that is essential for the future of the U.S. dairy industry."
Background on U.S.-China
The governments of China and the United States have imposed billions of dollars in retaliatory tariffs during the two-year trade dispute, which has put a drag on America’s dairy industry. U.S. dairy export value to China peaked in 2017 at $577 million, fell 29% to just over $500 million in 2018, and have fought to $305 million through September of this year—a 30% drop over 2018. Until this year, China had become the leading market for U.S. whey and a growing customer for U.S. cheese. Retaliatory tariffs, however, have derailed that potential and cost the U.S. dairy industry millions in sales, market share and jobs.
- China bought 33 percent of U.S. whey exports by value in 2018. Overall, U.S. whey shipments to China totaled to $174 million. From January to September 2019, with the retaliatory tariffs still in place, exports declined 41 percent year-over-year.
- Through September 2019, U.S. cheese export value fell 39%. That’s on top of a 39% loss in the second half of 2018.