On Tuesday, April 30, Eastern Time, executives of Smithfield Foods, the top U.S. pork processor, said that with the Trump tariff war, China is no longer a viable market and the company needs to find a replacement market again.

From a global perspective, China is not only the world's largest pork consumer, but also the only major buyer of pig by-products such as pig internal organs. This means that after being blocked from the Chinese market by high tariffs, it may be difficult to find a suitable buyer for pig by-products produced in the United States in the short term.

American pork giants are no longer optimistic

Smithfield Foods was founded in Virginia, USA in 1936 and is the world's largest pig producer and pork supplier. In 2013, Shuanghui International acquired Smithfield for US$4.7 billion. On January 28 this year, Smithfield Foods officially landed on Nasdaq.

As a U.S. pork processing giant, the company purchases live pigs from a large number of American farmers. Currently, this tariff war initiated by US President Trump is subverting global trade and forcing Smithfield to make changes.

This month, China also raised import tariffs on U.S. goods in a fight back after U.S. President Trump put forward high tariffs on China. Industry data shows that China's actual tariff rate on U.S. pork has pushed up to 172% after raising tariffs on imported goods this month .

Smithfield CEO Shane Smith said China accounts for about 3% of Smithfield's sales. The company mainly exports various by-products of pigs to China, such as pig stomachs, pig hearts and pig heads that American consumers usually don't eat.

Obviously, the intensity of this Sino-US trade war exceeded the company's previous expectations. In March, before trade tensions escalated, Smith said he believed that even if tariffs were raised, China would remain the best market for pig by-products.

And this week, the company is clearly less optimistic. "Since the Chinese market is basically equivalent to closing the door, we really have to adjust the focus of our business," Smith said on the quarterly earnings call.

"While this market is important, we do believe we have other options," he said.

Nowhere to sell except China

"China's current tariffs are 145%, which is not a viable market for us," said Donovan Owens, president of Smithfield's fresh pork business. He added that the company's strategy is to sell products to suboptimal markets.

However, it may not be easy for the company to find an alternative market. U.S. government data shows that the United States exported about $1.1 billion worth of pork products to China in 2024. More importantly, from a global perspective, China is the only major buyer of pig by-products such as pig viscera.

Erin Borror, vice president of the American Meat Export Association (USMEF), recently said: "China is the main buyer of pig by-products such as pig viscera. If you lose the Chinese market, in terms of pig by-products, the total annual loss (US pork industry) is about US$1 billion."

Brett Stuart, founder of the American agricultural trading company Global AgriTrends, analyzed that the special thing about the Chinese market is the products it purchases - including purchasing various visceral by-product parts (such as pig neck bones, pig heads, pig feet, pig tails, pig intestines, etc.). "China is the only market that accepts these products, and they have huge purchases."

Smithfield executives said the company also faces challenges in raw material costs under tariff pressure. To save money, Smithfield cut jobs at companies and factories in the first quarter.

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