The decline of U.S. export competitiveness in the Chinese meat import market

Abstract

AbstractChina has been the number one destination for U.S. agricultural exports in four of the past six years, and the U.S. has been China's leading import supplier. China's trade policies significantly impact U.S. farmers and agribusinesses and vice‐versa as seen from the recent U.S.–China trade dispute. In 2015, China began initiating a trade diversification strategy to increase trade with nations other than the United States. This research investigates the impacts of China's expanding global meat suppliers on its meat import demand, as well as on the relative competitiveness of U.S. meat exporters to China. Our meat import demand model is unique, in which it uses a restricted source‐differentiated almost ideal demand system that accounts for differentiation by source country and across meat products. Although the U.S. was the dominant source for China's meat imports previously, price and expenditure elasticities suggest that suppliers such as Australia, Brazil, the EU, Uruguay, and Argentina have the largest potential for China's meat market.