What is the impact of the Sino-US trade war on the food additive industry?

The highest tariff for some products reached 25%. There is no doubt that the escalation of the trade war between the two countries may affect many areas of the food industry, and food additives will also be affected to a certain extent. The impact of trade war on food extracts has been affected by many industries, including plant extracts, since Trump initiated the trade war between the United States, China and even the whole world. Ginseng, dried beans and vegetables are on Trump’s tax increase list. At present, most plant raw materials do not have tariffs. It is estimated that Trump will impose a 10% tariff on them. On the other hand, some plant extracts and other related products already have tariffs, which may increase further. But it’s hard to predict the final result or the exact time. The details may have to go to Trump. Manufacturers of plant materials in the food and beverage and dietary supplements industries are also worried because distributors and distributors who buy raw materials in the United States will first ship them to China for processing and then return them to the United States, a process that may lead to delays.

The pressure exerted by the United States and China on each other has increased the intensity of customs inspections. Trade disputes over the past few months have attracted the attention of many industries in the food and beverage sector, as well as agriculture and supply chains. Following the initial $34 billion tariff, the second proposed tariff list has been released and is still awaiting public comment. The impact of the trade war on dietary supplements in early July saw signs of easing the trade war between China and the United States. Trump suddenly announced a list of products that imposed 10% tariffs on exports to the United States, totaling $200 billion. This has led directly to the recent Chinese government’s strong response. On August 3, the Chinese government announced that it would impose tariffs on 5,200 items of the four lists. The specific tariffs are as follows: 25% on 2493 items; 20% on 1078 items; 10% on 974 items; and 5% on 662 items. At present, the products levied tariffs have not yet involved the dietary supplement industry, but the follow-up development is not clear. Fabricant, president of the American Natural Products Association, said it was not surprising, and he would confirm it at a hearing in August. Trump’s next round of tariff expansion will involve smaller businesses. Fabrican said that if there were signs that the two countries would continue to negotiate on tariffs, he would play his part by doing his best to avoid unpleasant results. Scott Steinford, executive director of coenzyme Q10 and natural seaweed astaxanthin associations, said that both associations have Chinese members, and the partners will make a preliminary review of them. Steinford said it did not seem likely that the new tariffs would affect supplement companies in the United States because they were currently limited to raw materials and bulk goods. Among the products exported by the United States to China, most of the products affected by tariffs are terminal products, except for a small amount of raw materials, such as ginseng. The Chinese market always favors “Made in America” dietary supplements, which have a good market in China. In particular, some online marketers benefited the most, such as Combola, which once became the world’s largest nutrition direct marketing (MLM) company through its development in China. And U.S. Youshana, whose biggest development and sales are achieved in the Chinese market. The trade war is a double-edged sword. The US tariff dispute is mainly aimed at China. The purpose is to correct the so-called “irregularities related to technology transfer, intellectual property rights and innovation” claimed by the US in the investigation. At the same time, China has filed a complaint with the World Trade Organization (WTO) concerning Washington’s list of tariffs on Chinese goods. Trade wars have always been one-stop, and tariff increases on plant raw materials have had a great impact on the export of domestic enterprises, but for American terminal enterprises relying on domestic raw materials, the cost of related products has increased, and they are also subject to tariff restrictions in China. No one will benefit from the trade war.

Post time: May-16-2019

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