Trade Tensions Ease as China Drops Some Pork and Soybean Tariffs

on Sep14
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BEIJING — China will exempt some American soybeans, pork and other agricultural products from additional tariffs, state media reported on Friday, in the latest move by Beijing to ease trade tensions with the United States.

The news came after President Trump delayed the next round of tariff increases on Chinese goods until after trade talks that are scheduled for early October, and officials in Washington confirmed China had made its first major purchase of American soybeans in months.

China’s decision to pull back on some new tariffs was another sign that the world’s two largest economies are trying to ease tensions in a trade war that has rocked global markets and cast a pall over the prospects for global growth. It also came as the country’s leadership faces challenges on several fronts, including an economic slowdown and civil unrest in Hong Kong.

State media provided few details on Friday, but China Central Television, the nation’s official broadcaster, cited Mr. Trump’s decision to delay the next round of tariff increases on Chinese products by two weeks. On Wednesday, he said they will now take effect on Oct. 15.

China’s move was welcomed on Friday by the Trump administration, which said it would help ease tensions ahead of the next round of talks.

“The really good part about this is there is some relaxation in the air with China exempting some tariffs. We’ve returned the favor and the negotiations are moving along nicely,” Larry Kudlow, director of the National Economic Council, said on Friday.

“And as the president said yesterday, we’re always available for a good deal.”

Some farmers in the United States have been hit hard by tariffs imposed by Beijing on American goods, a retaliation against the White House’s mounting tariffs on Chinese goods. The 2020 presidential election is approaching, and the farming vote was critical in some of the states that supported Mr. Trump in 2016. At Thursday’s Democratic presidential debate, several candidates attacked Mr. Trump over the trade war’s impact on farmers.

Mr. Trump’s advisers say they will continue to press China for a transformative deal, but many are also eager to calm tensions and avoid further tariff increases that might rock equity markets this year. They have considered striking an arrangement that would walk back the latest tranche of Mr. Trump’s tariffs on $112 billion of Chinese goods — leaving tariffs on at least $250 billion of products in place — in return for substantial purchases of soybeans, pork and other products, people familiar with the matter said. It’s not yet clear that China will make such an official offer at the bargaining table, however.

The easing of agricultural tariffs could also help China with its own problems. Food inflation has been rising as the Chinese authorities battle an epidemic of swine fever, which has forced China to cull more than a million pigs. Pork is a staple of the Chinese diet.

But Friday’s state media reports, brief in length and substance, left unclear whether China was willing to substantially roll back tariffs it had previously placed on American goods. It began to stop imports of American agricultural products a year ago as trade tensions escalated.

The National Development and Reform Commission and the Ministry of Commerce, the two sources of Friday’s news, did not respond to requests for comment on Friday, which was a holiday in China.

In further evidence of thawing relations, the United States Department of Agriculture said Friday that private exporters were reporting 204,000 metric tons of new soybeans sales to China — the first major purchases in months after Chinese state-supported industries stopped buying American soybeans and other agricultural products. On Thursday, officials from the U.S. Soybean Export Council said they had learned that China made purchases of 600,000 to one million metric tons of soybeans.

And on Wednesday, China published a short list of products to be spared from retaliatory tariffs on American-made goods, including cancer drugs, lubricants and pesticides. But those items are less central to the trade fight. Chinese purchases of American agricultural products make up a significant chunk of its imports from the United States.

The trade war, with a rising number of goods being taxed, not only has pushed prices higher for businesses and consumers in China and the United States, but risks a more permanent chill in relations between the two countries.

Trade tensions worsened in recent months following the collapse of talks in May. But senior officials of both governments are set to meet in Washington early next month amid rising economic worries in both countries

At a news conference on Thursday, a spokesman for China’s Ministry of Commerce indicated that the government was considering making concessions in order to pave the way for more trade talks.

Chinese companies were beginning to make inquiries about purchases of American soybeans and pork, said the spokesman, Gao Feng.

“We hope the two sides would move in the same direction, take practical actions and provide a sound environment for the trade talks, and it would be good for the two countries, and for the world,” Mr. Gao said.

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