BEIJING (Reuters) – China said on Friday it will waive import tariffs for some soybeans and pork shipments from the United States, as the two sides try to thrash out an agreement to defuse their protracted trade war.
The tariff waivers were based on applications by individual firms for U.S. soybeans and pork imports, the finance ministry said in a statement, citing a decision by the country’s cabinet. It did not specify the quantities involved.
China imposed tariffs of 25% on both U.S. soybeans and pork in July 2018 as a countermeasure to tariffs levied by Washington over allegations that China steals and forces the transfer of American intellectual property to Chinese firms.
The waiver comes amid negotiations between the United States and China to conclude a ‘phase one’ or interim deal to de-escalate a 17-month trade war that has roiled financial markets, disrupted supply chains and weighed on global economic growth.
A deal had initially been expected last month, but the two sides are said to be still seeking agreement on major issues such as which tariffs to roll back and the size of U.S. farm purchases China is willing to make.
Though Trump struck an upbeat tone on progress in talks on Thursday, a new round of U.S. tariffs covering about $156 billion of Chinese imports is set to kick in just over a week away on Dec. 15.
China’s tariff waivers on key U.S. agricultural products is a sign of its commitment to the deal, said an industry source who declined to be identified because of the sensitivity of the matter.
Beijing’s levies on U.S. soybeans initially brought its purchases of the U.S.’ most valuable farm export to a virtual halt, although it has offered waivers to buyers in recent months.
Those waivers are said to have expired, although new exemptions may come too late, said an analyst.
“December arrivals are already pretty high and then we’re getting into the Brazil crop,” said Darin Friedrichs, senior Asia commodity analyst at INTL FC Stone.
“There’s limited space to buy new U.S. soybeans at this point.”
Exemptions for pork are likely to be in higher demand, with less than two months until China’s Lunar New Year holiday, the country’s peak consumption period.
China has been scouring the world for more meat to fill a big shortage of protein after an outbreak of African swine fever devastated its massive hog herd, cutting supplies of pork.
U.S pork exports to China and Hong Kong are already up 47% in volume terms from January to September, even with high duties in place.
An adviser to the Chinese government said exemptions on the products suited Beijing, as they helped meet market demand for such goods while reducing the trade surplus with the United States.
“We might as well buy soybeans from the U.S. rather than from Brazil. Brazil is actually selling us what was purchased from the United States and they even hiked the prices up before selling to us. In that case, we’d better just buy from the United States,” she said.
(Reporting by Min Zhang, Huizhong Wu, Chen Yawen and Dominique Patton; writing by Se Young Lee; editing by Richard Pullin & Kim Coghill)