China eases tariff burden on US soybeans as trade war peace talks loom, offering a tentative step towards resolving the dispute.
China is planning to ease the burden on Chinese farmers by suspending a 25% tariff on imported ‘US soybeans’ , amid efforts to revive stalled trade talks with ‘Washington’.
Key Players and Negotiations
The move comes as China’s top economic planner, the National Development and Reform Commission (NDRC), announced the suspension of the tariff, which was imposed in July 2018. The NDRC stated that it would lift the tariffs on ‘US soybeans’ , pork, and other agricultural products, subject to certain conditions.
Background
The tariffs were initially introduced as part of the US-China trade war, with China imposing its own tariffs on US goods. The move was seen as a retaliation against US President Donald Trump‘s decision to impose additional tariffs on ‘Chinese imports’ .
The US-China trade war began in 2018, with the US imposing tariffs on Chinese goods worth over $200 billion.
China retaliated by slapping tariffs on US imports worth $110 billion.
The conflict escalated in 2020, with both countries increasing tariffs and imposing restrictions on each other's tech industries.
Key issues include intellectual property theft, market access, and state subsidies.
According to the US Census Bureau, bilateral trade between the two nations declined by over 10% in 2020 compared to the previous year.
Impact on Global Markets
The suspension of the tariff has been welcomed by US farmers, who have suffered losses due to the trade tensions. However, some analysts have expressed skepticism about the impact of the move, citing concerns that China may not follow through on its commitments.
Talks and Uncertainty
Despite the easing of tariffs, the future of the trade talks between ‘Washington’ and ‘Beijing‘ remains uncertain. The two sides are set to meet in October for fresh negotiations, but the mood is tense, with both sides presenting hardline positions.
The US-China trade talks have a long and complex history, dating back to the 2001 accession of China to the World Trade Organization (WTO).
Since then, the two nations have engaged in numerous rounds of trade negotiations, with the most recent being the Phase One agreement signed in January 2020.
The talks aim to address issues such as intellectual property rights, technology transfer, and market access.
According to a report by the Peterson Institute for International Economics, the US-China trade relationship is valued at over $700 billion annually, making it one of the largest bilateral trade relationships worldwide.
A Path Forward?
The suspension of the tariff is seen as a positive development by some analysts, who believe it could pave the way for a breakthrough in the talks. However, others warn that the issue of trade imbalances and intellectual property theft will remain major sticking points.
Conclusion
As the US-China trade war continues to cast a shadow over global markets, ‘China’s decision’ to ease the tariff burden on ‘US soybeans’ is seen as a tentative step towards resolving the dispute.
The China-US trade relationship is one of the most significant in the world, with both countries being major trading partners.
In 2020, the total bilateral trade value reached $737 billion.
The US imports mainly electronics and machinery from China, while exporting aircraft, vehicles, and agricultural products to China.
However, the relationship has been marred by trade tensions, including tariffs imposed by both countries.
According to a report by the US-China Business Council, the US exports to China support over 2.7 million American jobs.
