US cheese-producing states benefit from China's tariff cut

US cheese-producing states, especially Wisconsin, the nation's largest producer, will benefit from China's recent move to reduce tariffs on cheese from 12 percent to 8 percent.

The tariff reduction on US cheese was one of 187 US product categories that China cut tariffs on by an average of 17.3 percent to 7.7 percent.

In 2016, Wisconsin was the fourth-largest exporter of cheese of all kinds to China, accounting for more than $3.8 million in sales, according to the Agriculture Marketing Resource Center at Iowa State University. Exports to China have risen 59 percent over the last year, according to the center.

Total US cheese production in 2016 was 12.2 billion pounds, up 3.4 percent from 2015, according to center, and Wisconsin led the nation in cheese production in 2015 with 3.1 billion pounds.

"China is tracking to become the world's largest cheese importer in the years ahead. It is critical that the U.S. dairy industry take part in that growth," said Tom Vilsack, president and CEO of the US Dairy Export Council. "This decision by China will chip away at the tariff disadvantage US suppliers face in China and improve US competitiveness in a rapidly expanding market."

Prior to the tariff reduction, it was more difficult for US states to break into the Chinese market, according to Jaime Castaneda, senior vice-president of the non-profit US Dairy Export Council, which seeks to boost demand for US dairy products abroad.

China relied on New Zealand for its cheese imports before it cut the tariff on US cheese, but China's cheese demand has increased more than seven-fold over the last 10 years to 100,000 metric tons, according to Milk Magazine, and the country is looking to other markets. With the tariff now at 8 percent, US producers can be much more competitive in the Chinese dairy market.