Trade

China To Reduce Some Retaliatory Tariffs. Barely.

JM Ashby
Written by JM Ashby

Whether or not China can actually double their purchases of American exports as part of "phase one" of Trump's "biggest and greatest deal ever" largely depends on rolling back retaliatory tariffs that made American goods undesirable in the first place, but China will only partially roll back some of their tariffs.

Trump rolled back tariffs he imposed in the fall of 2019 from 15 to 7.5 percent and China will roll back the retaliatory tariffs they imposed in response to that, but their tariffs won't be reduced by as much.

Duties on American soybeans, for example, will only be reduced by 2.5 percent.

The halving applies only to the additional tariffs imposed by Beijing in September, and not to the total duties on goods built up since 2018 during the trade war.

It will see total tariffs on soybeans fall to 27.5% from 30%, total duties on pork drop to 55% from 60% and those on beef do down to 30% from 35%. Tariffs for U.S. crude oil, which was first targeted in September, will be reduced to 2.5% from 5%.

China is supposedly going to buy even more American soybeans this year than they did in 2017 before Trump's trade war began, but it's difficult to see that happening if tariffs of 27.5 percent remain in place.

Increased agricultural purchases are the cornerstone of Trump's 'greatest deal,' but duties on pork and beef are also dropping by only 5 percent.

China has moved some American farm goods over the past few months by issuing waivers for state-controlled importers, but most privately-owned businesses will likely avoid American farm goods while retaliatory tariffs remain in place.

China has said they would purchase American goods in line with "demand and market conditions" and those conditions currently include the outbreak of a deadly virus that has prompted the Chinese government to reconsider their economic growth targets for the year.

  • muselet

    Donald Trump reminds me of the stereotypical bozo on his way back from Las Vegas who has to sell his spare tire to buy gas to get home.

    Master negotiator, my foot.

    –alopecia