It looks like a deal between the U.S. and China may be coming together in implementation after all.
China’s Ministry of Finance announced on Feb. 6 that the country would halve additional tariffs on U.S. products starting on Feb. 14.
Reducing tariffs imposed late last year on $75 billion worth of U.S. goods is a sign China is implementing the Phase One agreement despite setbacks from the Wuhan coronavirus outbreak, reported the South China Morning Post, a Hong Kong-based outlet.
Beijing halved 10 percent punitive tariffs to 5 percent, and 5 percent tariffs to 2.5 percent. The country said the planned reduction of tariffs was in response to the U.S. halving a 15 percent additional tariff on Chinese goods to 7.5 percent on Feb. 14.
China increased additional duties on goods in late August, and planned to add a second round of duties in December, but held off.
The February announcement came at a time when China’s ability to honor the $200 billion deal is being questioned due to the severity of the coronavirus outbreak.
“China is concentrating on battling coronavirus. The U.S. government should be flexible on China-U.S. Phase One trade deal as a way to show goodwill to Chinese people working hard to contain the epidemic. I believe doing so will not harm President [Donald] Trump’s image among American public,” Hu Xijin, editor-in-chief at state-run Global Times, tweeted.
At the National Cattlemen’s Beef Convention in San Antonio, TX, USDA Secretary of Agriculture Sonny Perdue told attendees, “If they’re really trying and it really just blows the economy out of the water, then we would have to be understanding of that,” regarding the disease outbreak.
The Phase One deal does read that the two countries may “consult” each other in time of natural disaster or other emergencies that could affect commitments, which may give China some flexibility while it battles the coronavirus.
China’s move to halve the tariffs appears to be a sign of commitment to the Phase One deal, and the country said Feb. 6 tariffs would continue to be reduced until they were removed altogether.
However, China has yet to make large scale purchases of U.S. farm goods in 2020. Back in January, Li Xingqian, head of the Chinese foreign trade department, said at a press conference, “We will expand exports from the United States based on the principles of the market and World Trade Organization rules, and will not affect imports from other countries.”
In fact, market sources told AgriCensus Chinese soybean purchasers have bought “at least 1 million metric tons of soybeans from Brazil” since the end of the extended Lunar New Year holiday.
Since the trade war started nearly two years ago, the U.S. has enforced $550 billion worth of tariffs on Chinese goods, and in turn China has imposed $185 billion worth of tariffs on U.S. goods. — Anna Miller, WLJ editor
