Hours after complimenting China for waiving tariffs on some U.S. products, President Trump announced on Wednesday a two-week delay, until October 15, of higher tariffs on $250 billion worth of Chinese-made goods. Trump said on social media that the delay was “a gesture of good will” that took into account the October 1 celebration of Communist control of China.
The mutual steps to ease trade tensions between the world’s two largest economies could influence working-level discussions expected at mid-month. The sessions would set the stage for ministerial meetings in Washington in early October.
“At the request of the vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary on October 1st, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th,” tweeted Trump.
Hu Xijin, editor of the China-based Global Times newspaper, welcomed the president’s announcement. “It should be seen as a goodwill gesture the U.S. side made for creating good vibes for the trade talks scheduled in early October,” said Hu, who is believed to have sources high in the Chinese government.
The Customs Tariff Commission of the State Council said in Beijing that it would waive for one year tariffs on 16 types of U.S. products, including shrimp; fish meal; whey, an ingredient in livestock feed; and cancer-treatment drugs. Importers can apply for refunds of tariffs already paid on 12 of the 16 product lines. The waivers, which take effect on Tuesday, are the first allowed by China. The Tariff Commission said that additional lists of waivers will be announced in the future, reported Chinese news agency Xinhua.
“I think they did the right thing, but good for them,” Trump said at the White House. “I think it was a gesture, OK, I think it was a good move.” The president said he wasn’t surprised by the waivers and that, in his view, “China’s supply chain is breaking up” and its leaders are ready to make a deal. “We’ll see what happens.”
Analysts noted that the list of exemptions did not include soybeans or pork, two major U.S. exports. CNN quoted analyst Artur Baluszynski as saying, “Chinese tariffs that really matter are the ones on U.S. agricultural and manufacturing goods, produced mainly in states with strong support for Donald Trump. We just don’t see China willing to negotiate on them before the race for U.S. presidential elections really kicks off.”
The trade war slashed U.S. ag exports to China, formerly the No. 1 customer, to $7.5 billion this year, one third of the volume before the nations imposed tit-for-tat tariffs on each other. China, which now relies on Brazil for most of its soybean imports, opened the door this week to imports of soybean meal from Argentina, which ranks third to Brazil and the U.S. as a soybean producer. The South American country exports four times as much soy meal as soybeans. Although China prefers to import soybeans for crushing domestically, it is running out of alternatives.
Citing an unnamed source, the South China Morning Post reported that China was expected to agree at the October meeting to buy more U.S agricultural exports.
China’s National Day holiday on October 1 marks the anniversary of the 1949 proclamation by Red Army leader Mao Zedong of the formation of the People’s Republic of China. The Communist forces defeated the Nationalist government in a civil war that ran intermittently from 1927 to 1949.
Source: Chuck Abbott, Successful Farming