US-China trade war impacts pet businesses and pet owners

Trade war impacts pet food businesses and pet owners

A recent article published in the New York Times tries to evaluate the impact of ongoing US-China trade war and the future of US pet care brands in China.

The hot topic of Sino-US trade war reached the columns of the New York Times again few weeks ago, in an attempt to analyze the consequences of tariffs on the pet care industry. As of July 6 2018, pet food exports from the United States to China became subject to a 25 percent tariff, adding to unofficial reports of delayed shipments of U.S. pet food imports at customs checkpoints.

A significant industry

It might come as a surprise to the NYT but tariffs being applied to pet care products is new sign that China’s $25 billion pet market is becoming significant enough for both countries.

US brands such as Wellness, Canidae or Natural Balance have been present in China for a long period and hold very good market shares. Others, such as Solid Gold, have gained reputation over the years with just a fraction of their SKUs available through cross-border E-commerce. 

At the same time, despite announcement in the US from major retailers, the volume of products made in China and sold in the US keeps breaking records.

From end users’ perspective, tariff come as a really bad news. 

Chinese official voice

Chinese experts are approaching the matter with protectionism in mind, arguing that imported pet food should be considered as a luxury product.  

“Imported pet food should not be regulated as a normal product by Chinese authorities. They are luxury products and it is reasonable to levy some consumption duty on imported pet food” 

(Ma Wenfeng, senior analyst at Beijing Orient Agribusiness Consultancy)

According to the patriotic “Global Times”, many end users are considering a shift to domestic products or pet food imported from countries like New Zealand, France and Canada, as they are also somewhat affected by the market sentiment triggered by the escalating China-US trade tension. 

The public

Beyond the short term effects of a trade war that might end sooner than announced, domestic pet owners do not seem less inclined to buy US food.

 

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