Author: Brent Moore, Australian trade commissioner and consul at the Australian Consulate-General in Shanghai. first published as a LinkedIn post By Brent Moore on 17th June 2019.

Publicly available trade statistics paint a picture of the impact on Australian food exports to China stemming from the ongoing trade dispute between Beijing and Washington. A relatively small number of affected food products are supplied by both the US and Australia, even fewer at the same time of the year.  For example, US products that face additional tariffs; soybeans, chicken and pork, are not supplied by Australia due to lack of production or technical market access. The main areas of trade overlap are dairy, fruit and nuts.

Beginning with dairy, US exports of whey, butter, milk and cream and yogurt faced a 25% supplementary tariffs since July 2018, on top of the MFN tariffs ranging from 8 to 20%. However cheese is the only category in which the US is a major supplier – for most dairy products the US has a combined market share of 5% – well behind NZ at 55%.

While US monthly exports have fallen since the introductions of additional Chinese tariffs, thus far Australian exports in this time have largely remained steady, with the slack also being picked up by other major suppliers such as NZ and the EU.

Australian fresh fruit (cherries, oranges) are sold counter seasonally to the US, hence largely is insulated from the dispute. Nuts, of course, are a different bag. The US produces around 80 per cent of the world’s almonds and in 2018 had a 58% share of China’s imports. Australia is the only other major supplier. US almonds will soon face a combined 50% import duty in China. Conversely, Australian almonds have been duty free from 1 January 2019, courtesy of the China Australian Free Trade Agreement.

A view of the monthly trade stats show Chinese nut processors, whom sell in a growing domestic market worth around $10 billion annually, clearly took the opportunity to stockpile US nuts prior to the most recent escalation in duties, while significantly increasing orders from Australia. However since Australia only produces 6% of the world’s almonds –meeting any shortfall during the dispute will be hampered by limited supply unless production can increase.

Brent Moore is Trade and Investment Commissioner at the Australian Consulate General in Shanghai. The views and analysis expressed in this article are those of the author and do not necessarily reflect those of the Australian Trade and Investment Commission.