The world's two biggest economies have exchanged blows for over a year, with tariffs now impacting hundreds of billions of dollars in two-way trade.
China will waiver tariffs on “some” imports of US soybean and pork, it said on Friday, in the latest sign of easing trade tensions between Beijing and Washington as they try to finalise a partial trade pact. The world’s two biggest economies have exchanged blows for more than a year, with levies now imposed on hundreds of billions of dollars in two-way trade. The olive branch comes as the two sides edge towards a mini agreement Washington says includes a Chinese promise to increase the purchase of US farm products.
It is also just before a fresh round of US sanctions are due to kick in on December 15, which observers fear could jolt the negotiations. “The Customs Tariff Commission of the State Council is carrying out the exclusion of some soybeans, pork and other commodities based on applications from enterprises,” the finance ministry said in a statement. Chinese companies have already “independently imported certain quantities of goods from the United States”, the statement said, without offering details. The duty on soybeans has gone up from three to 33 percent, after two rounds of tariffs — 25 percent in July, 2018 and another five percent in September. China is the world’s biggest consumer of soybean and has been shopping elsewhere, such as Brazil, to boost supplies.
Beijing has increased tariffs on US pork three times since the trade war started, raising the total duty from 12 to 72 percent between April 2018 and September this year. Exempting tariffs on pork could also help ease a surge in prices of China’s staple meat, which has more than doubled over a year, with an outbreak of African swine fever last August leading to the culling of nearly of third of the country’s pig herd. The country has tapped its strategic reserve of the meat but that has not stopped costs spiralling. Hopes had risen last month that Beijing and Washington were close to reaching a mini deal.
But comments from US President Donald Trump and recent US legislation backing Hong Kong pro-democracy protests and China’s Uighur minority appeared to throw the talks off track. On Tuesday, Trump appeared to dash hopes for a deal this year by suggesting he would be happy waiting until after the 2020 presidential election before signing off on it. China echoed those comments Wednesday by saying they “will not set any time limit” on signing an agreement.
But China’s commerce ministry spokesman Gao Feng said at a news briefing Thursday that the two sides were “maintaining close communication.” He added, however, that “if the two sides are to reach a phase one deal, tariffs should be reduced accordingly”. Trump has insisted that China should buy USD 40-USD 50 million-worth of US agriculture products as part of the deal, which critics say is difficult to achieve. China’s imports of US farm goods fell in 2017 to USD 19.5 billion, before dropping sharply last year to just over USD 9 billion after Beijing imposed burdensome taxes on US imports in retaliation for similar measures by Washington.
Despite the gesture, ties remain tense between the two. China’s foreign ministry said Friday it had taken reciprocal “countermeasures” after the US said in October that Chinese diplomats will have to notify the State Department in advance of any official meetings with US diplomats. US diplomats will now have to notify the foreign ministry five working days before meeting local officials.