Chinese importers have been applying for — and getting — tariff exemptions to buy U.S. dairy products as a result of the “phase one” trade agreement, U.S. Dairy Export Council CEO Tom Vilsack tells Agri-Pulse.
Some of the applications to buy tariff-free dairy products, including skim milk powder, sweet whey, whey protein concentrate, lactose and cheese have already been granted, Vilsack said in an interview Wednesday.
While the exemptions raise expectations of purchases, there is no guarantee that sales will result, Vilsack cautioned. But he still stressed that it is a “good news” development for the U.S. dairy sector that has seen exports decline to Asia because of the spread of COVID-19, or the coronavirus.
Chinese port delays have hurt shipments to China, while demand has dropped off in countries like South Korea as consumers have shunned restaurants and events, Vilsack said.
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“We haven’t seen numbers yet to determine the significance of the virus on exports, but the chances are it will have some impact because we entered 2020 with a lot of momentum … There was optimism an hope that we would see a continued increase of export activity.”
China began on Monday accepting and reviewing applications for tariff exemptions on dairy, soybeans, pork, corn, wheat and other commodities. China permanently exempted U.S. dry whey, a component of swine feed, from trade war tariffs last September.
The recently-announced tariff exemptions are widely believed to be the mechanism which China intends to use to fulfill its pledge under the “phase one” deal — signed in the White House in December — to buy $36.5 billion worth of U.S. farm goods this year. China also promised to import $43.5 billion of U.S. ag commodities next year.
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