Trade war retaliations and compromises between China and the U.S. continue to be battered back and forth.
China announced an additional $75 billion in tariffs to be placed on U.S. exports in late August, as a retaliation against the U.S.’s added tariffs on $300 billion worth of Chinese exports. In response, the U.S. hiked up yet another series of tariff increases to be implemented on Oct. 1.
However, China made a peace proposal in a phone call the first week of September with top U.S. trade officials with an offer to buy a modest amount of U.S. agricultural goods, according to a Sept. 6 report by Politico. This would be the first time to resume trade talks since July 2019 after a month of back-and-forth tariff escalations.
The two countries plan to meet first in mid-September and then October to discuss the text of a deal based on a draft the two countries negotiated in April, according to a Sept. 11 report by South China Morning Post, a Chinese-government controlled media outlet. As part of the negotiations, China has agreed to buy U.S. products in exchange for tariff delays and easing bans against Chinese telecommunications company Huawei.
China announced on Sept. 11 the first round of tariff exemptions for 16 types of U.S. products, which include some anti-cancer drugs and animal feed ingredients whey and fish meal, according to a statement from the Chinese Ministry of Finance.
President Donald Trump tweeted later that day, “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.”
The gestures may ease tensions, but some analysts think they do only that. “The exemption could be seen as a gesture of sincerity towards the U.S. ahead of negotiations in October but is probably more a means of supporting the economy,” ING’s Greater China economist Iris Pang wrote in a note. “There are still many uncertainties in the coming trade talks. An exemption list of just 16 items will not change China’s stance,” she continued.
The 16 products are only a few compared to the 5,000 products already subject to China’s additional tariffs. In addition, major U.S. exports such as soybeans and pork face heavy tariffs while China has amped up imports from Brazil and other suppliers. — WLJ