Smithfield Foods China is Adversely Affected Due to International Trade War

China is an important market for US pork meat. Reports suggest that annually on average US sells pork meat valued approximately $1.1 billion. Very recently some socio-political events have triggered a series of trade wars between the two countries. This adversely affects the manufacturers and producers of goods of both the countries. Businesses of US are low when it comes to profitability. The phenomena started when the US imposed trade restrictions on China and other countries. First, it imposed tariffs on products exported from countries like China. This set the alarm bells ringing for many Chinese businesses and product manufacturers. Their shares started falling in the international stock markets and their business is becoming unprofitable by the day.

China’s Imposition of Tariff on Exports is a Big Blow to Many Businesses

The Chinese responded to the US by imposing trade tariffs on the US imports of a wide variety of goods including pork meat. This prompted the US to contemplate on setting a fresh trade tariffs citing intellectualproperty theft. All this has resulted in a full-fledged trade war between the two countries. Virginia based Smithfield Foods China is the world’s largest producer of pork. The company has been purchased by China’s WH Group. China’s move to impose tariffs on US goods including pork is indeed a big blow to the Virginia based Smithfield Foods China.

Trade War-Intensifying by the Day

The company CEO said that their business sells products, pork meat to over 40 countries around the world. The Sino-US trade war is intensifying by the day and US farmers are of the opinion that China is heavily reliant on US produced soya beans and sanctioning of US soya bean exports can lead to severe consequences for the Chinese food industry. China uses US soya beans to feed its poultry, pork. The tariffs on soya beans would certainly raise the costs for the WH Group. In this context, it is to mention that the country itself has a large pork-processing business.

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