Trump's Tariff Policies Take Effect, Rocking Global Stock Markets: Implications for China's Pig Farming Industry

I. Tariff Escalation Triggers Global Market Turmoil

On April 2, 2025, the Trump administration officially implemented "reciprocal tariffs," imposing 10%-46% duties on major trading partners including China, the EU, and Canada. Chinese goods face the highest tariffs of 34%, covering sectors like semiconductors, automobiles, and agricultural products. Global stock markets suffered a "Black Monday" in response: U.S. indices plunged over 5%, with NASDAQ entering a technical bear market; China's A-shares dropped over 6%, with over 5,200 stocks falling, led by export-oriented sectors like consumer electronics and solar energy.

Amid this trade storm, agriculture emerged as a rare bright spot. Chinese agricultural stocks rose against the trend, with Shennong Seed, Dunhuang Seed, and Beidahuang hitting daily limits. In the pork sector, Xiangjia Shares and Jinhe Bio saw notable gains. Analysts attribute this to expectations of accelerated import substitution for agricultural products, rising feed prices, and improved sector sentiment.

II. Pig Farming Faces Cost and Supply Chain Pressures

1. Rising Feed Costs
   The U.S. is a major source of China's soybean and corn imports. In 2024, China imported 22 million tons of soybeans (21% of total) and 2.07 million tons of corn (15%) from the U.S. With a 34% tariff, U.S. soy and corn prices will exceed those from South America. Guosen Securities estimates feed costs—comprising 30% soybean meal and 40% corn—will increase by ¥100-150 per pig.

2. Adjustments in Pork Import Structure
   Tariffs on U.S. pork (416,000 tons imported in 2024, 18% of total) will likely shift sourcing to Brazil and Russia. Brazil already dominates China's pork imports, while Russia aims to expand exports to 100,000 tons over five years. However, global supply chain shifts may cause price volatility.

3. Increased Industry Polarization
   Smaller farmers face greater cost pressures, while giants like Muyuan Foods (vertical integration) and Wen's Foodstuffs ("company + farmer" model) are better positioned to absorb shocks.

III. Policy Responses and Market Opportunities

1. Domestic Policy Support
   China retaliated with 34% tariffs on U.S. imports and pledged to maintain tax-free zones. The Ministry of Agriculture plans to boost soybean planting and promote corn-soybean substitution. Provinces like Zhejiang and Chongqing offer subsidies and loans to farmers.

2. Import Substitution and Industrial Upgrading
   Tariffs are accelerating self-reliance: China's soybean output reached 20 million tons in 2024 from 150 million mu planted. Pig farming 规模化率 (scale ratio) exceeds 60%, with digital management cutting costs. Consumer preference for domestic brands like Muyuan's "Nanyang Black Pig" is rising.

3. Global Market Expansion
   Chinese firms are expanding overseas: Muyuan set up a Vietnam subsidiary, while New Hope acquires foreign ranches. Meanwhile, Russian and Brazilian exporters are filling the U.S. gap.

IV. Outlook: Short-Term Challenges, Long-Term Opportunities

In the short term, rising feed costs and import disruptions will squeeze profits. However, structural reforms promise long-term resilience:

• Cost Optimization: Scale and technology (precision feeding, disease control) will reduce costs.

• Supply Chain Security: Diversified imports (e.g., Brazilian soy) and domestic production (Northeast Soybean Revitalization Plan) will mitigate risks.

• Premium Products: High-end brands and ready-to-eat pork (e.g., Wen's "Fresh Pork") are growth drivers.

Huaxi Securities forecasts a potential pig price rebound in H2 2025, benefiting cost-efficient 龙头企业 (leading companies). Investors should monitor Muyuan and Wen's, while 警惕 (remaining vigilant of) feed volatility and oversupply risks.

Conclusion
Trump's tariffs represent both a challenge and a catalyst for China's pig farming sector. With policy support and evolving consumer demands, the industry is transitioning toward higher-quality growth, positioning itself for a stronger role in the global value chain.