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Soybeans are AMerica’s biggest farm export
Topline: China is to waive tariffs on some U.S. soybeans and pork imports as the world’s two biggest economies worked on an interim deal to end the 17-month-long trade war.
- China placed tariffs of 25% on the agricultural products in July 2018, in response to the White House’s move to impose tariffs on Chinese goods over the alleged theft of American intellectual property.
- Beijing had promised in September to lift the tariffs that lifted taxes on soybeans imports to 33% from 3% but the new tax exemption only applies to some firms and some imports.
- China’s finance ministry has not shared any further detail on the waiver of the agricultural tariffs.
- Washington and Beijing are currently ironing out an interim “phase one” deal to wind down the trade battle that has rattled markets, and cost Chinese exporters and American farmers billions.
- The waiver was announced just days before a new set of U.S. tariffs on $160 billion of Chinese goods kicks in on December 15.
Key background: China’s tariffs on soybeans, the U.S.’ most valuable farming export, have resulted in U.S. sales to China falling 90% since 2017. As a result, the Trump administration has forked out some $28 billion in aid to American farmers hit by the sales drop. It has also pressed China to raise its imports of soybeans from U.S. as a goodwill gesture in anticipation of a trade deal.
China has moved to increase imports of soybeans from Argentina and Brazil to lessen its reliance on the U.S. but a an outbreak of African swine fever may have forced Beijing’s hand on pork imports. Hundreds of millions of pigs have been culled, or died, from the disease in China sending domestic pork prices through the roof.
Additional fact: China is the world’s largest importer of soybeans, bringing in tens of million on tonnes each year.
