China to exempt US soybeans and pork from tariffs
- Announcement comes just over a week before Washington is due to impose 15 per cent tariffs on US$160 billion of Chinese goods
- Two sides are still trying to agree an interim trade deal
China announced on Friday that it would exempt some US soybeans and pork from tariffs – attempting to inject some momentum into their ongoing trade talks.
Chinese companies have already “imported certain quantities of goods from the United States”, the statement said.
The US is set to impose 15 per cent tariffs on US$160 billion of Chinese imports on December 15.
At a press conference in Beijing on Thursday, Ministry of Commerce spokesman Gao Feng again said that if the two sides agreed an interim trade deal, “tariffs should be reduced accordingly”.
Beijing imposed tariffs of 25 per cent on US soybeans and pork in July 2018 after the US introduced punitive duties on Chinese products. Washington’s move was a response to accusations that American firms operating in China were being forced to hand over their technologies.
Beijing’s exemption comes as officials from the two nations continue to work towards a “phase one” deal to de-escalate the tariff war.
Liu Weidong, a China-US affairs specialist from the Chinese Academy of Social Sciences, said the tariffs exemption “aims to boost the confidence of the American farming and agricultural industry”.
While most farmers continued to support Donald Trump’s stance on the trade war, the tariff exemption from the Chinese ministry could indicate its willingness to continue negotiations despite the growing uncertainty about the prospects for a deal.
The US President recently said it was possible an agreement might not be reached until after the election in November 2020, while the Chinese foreign ministry said Beijing did not have a deadline for reaching a deal.
China’s soybean production up 13 per cent as subsidies help farmers respond to US trade war
Trump’s signing of the Hong Kong Human Rights and Democracy Act has further raised tensions and drew a sharp rebuke from Beijing.
US officials have said the latest tariff increase will come into force on December 15 if there is no progress in the negotiations, and Beijing said China would respond if Washington imposed fresh duties on its goods.
The US has demanded China buy more of its agricultural products, but Beijing said all such purchases would be based on demand.
China’s pork industry has been devastated this year by African swine fever, with more than 1.1 million pigs being culled from an estimated herd of 350 million.
Meanwhile, the country’s soybean stocks remained close to record-low levels last week – at 4.09 million megatonnes – despite climbing 20,000Mt from the previous week, according to figures from the China National Grain and Oil Information Centre.
Low stocks and weak demand for animal feed had limited the amount of soybeans “crushed” – the process of turning raw beans into meal or oil – in recent weeks, it said.
“Affected by African swine fever and weakening demand in aquaculture during the winter, soymeal demand was poor.”
Since the start of the trade war, China has increased its purchases of soybeans from Argentina and Brazil in a bid to reduce its reliance on the US. Since 2017, America’s sales of soybeans to China have fallen by 90 per cent.
Brazil’s soybean harvest is expected to be 27 per cent larger than America’s this year, according to agricultural data provider Gro Intelligence.
In September, China opened its market to soymeal livestock feed from Argentina for the first time, in what exporters in Buenos Aires described as a historic agreement.
Additional reporting by Finbarr Bermingham and Jerry Wu
