China says it’s removing tariffs on some goods
Move on 16 U.S. products in anticipation of coming talks
BEIJING — China extended an olive twig, rather than a branch, to the United States in their trade war Wednesday, announcing it would exempt 16 American-made products from tariffs as a sign of goodwill ahead of talks scheduled for next month.
But the gesture, which Beijing said was designed to ease the dispute’s impact on American companies, does not offer relief from tariffs on the big-ticket agricultural products such as soybeans and corn that are causing the most hurt in the United States.
“China wants to claim the moral high ground before the October talks and to send a message of goodwill,” said Yao Xinchao, professor of international trade at the University of International Business and Economics in Beijing. “It’s all about molding public opinion” to portray the United States as the aggressor, Yao added.
China’s Ministry of Finance said that 16 types of U.S. products would be exempt from retaliatory tariffs for a year from next Tuesday. The list included varieties of animal feed such as alfalfa and fish meal, cancer drugs gefitinib and capecitabine, base oil for lubricants and lubricating grease, and some farm chemicals.
Further exemptions will be announced in the coming weeks, the ministry said, and tariffs that have been imposed will be refunded.
“The purpose is to minimize the impact of economic and trade frictions on Chinese enterprises, and to show China’s consistent calmness and rationality in dealing with these frictions,” the state news agency, Xinhua, wrote in a commentary published Wednesday evening. It characterized China as
“highly responsible.”
But the list offers no respite for American farmers affected by Chinese tariffs on produce including corn, soybeans and pork. Exports of American agricultural products have been hit especially hard in the trade war — the Chinese duty on American pork now sits at 72 percent — leading the Trump administration to offer compensation to American farmers to the tune of $28 billion.
China knows that this represents a point of leverage: the trade war is playing out in the American heartland ahead of an election year.
“Pork and soybeans are two important bargaining chips that China won’t play easily,” said Yao. Wednesday’s measures marked the first time in the dispute that tariffs have been removed, not added.
“I think both sides want a deal,” said Kent Kedl, a China analyst at the Control Risks consultancy. “So I think they’re trying to feel their way around and find out what might break the stalemate. China is speaking the language of the Trump administration here: tariffs.”
China and the United States have been involved in a tit-for-tat tariff battle, imposing rounds of duties on each other’s products for more than a year.