April 2, 2018 / 5:10 AM / 21 days ago

U.S. dairy group partners with China researchers to boost trade opportunities

CHICAGO (Reuters) - A U.S. dairy trade export group has partnered with a Chinese university to create a food science research center, hoping to bolster relations and expand dairy exports from the United States into China, the group said in a statement.

The U.S. Dairy Export Council (USDEC) signed a memorandum of understanding on Monday with China’s Jiangnan University, in the city of Wuxi, near Shanghai, to build the U.S.-China Dairy Innovation Center at the school, the USDEC said.

The tie-up is occurring amid rising trade tensions between the world’s two largest economies, as the administration of President Donald Trump has imposed tariffs targeting Chinese products including solar panels, steel and aluminum. Concerns that China would target U.S. agricultural products for retaliation were borne out when China announced extra duties on U.S. foodstuffs earlier on Monday.

China said the extra duties of up to 25 percent would affect 128 U.S. products including frozen pork, wine and fruits and nuts.

Still, the announcement between the USDEC and Jiangnan does highlight the interconnectedness of the two economies, even as the trade dispute escalates.

In addition to the created of the food science center, the agreement aims to boost the development of food products for Chinese consumers that use U.S. dairy as ingredients, help U.S. dairy exporters better understand how to work with Chinese food manufacturers, and bolster the Chinese student’s academic research into dairy.

The agreement is the latest effort by the USDEC to boost business with China, including and agreement last year on U.S. dairy plant registration and a unilateral reduction in Chinese cheese tariffs, said USDEC President Tom Vilsack.

“Asia generally is very important to the U.S. dairy industry, and we need to build these long-term relationships,” said Vilsack, who was a former secretary of agriculture in the Obama administration.

China and Hong Kong combined were the third-largest export markets for U.S. dairy products in 2017, behind Mexico and Canada. U.S. dairy exports worldwide reached $5.48 billion in 2017, up 14 percent from 2016, according to government and trade data.

However, the trade disputes - and the potential of tit-for-tat retaliation - do have Vilsack concerned.

“We’re hoping it all gets worked out,” said Vilsack, whose group has hired more staff to develop new business in China.

Reporting By P.J. Huffstutter; Editing by Christian Schmollinger

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