China has announced this Friday, in the middle of the Mid-Autumn Day and with the offices closed, it will exempt US soybeans and pork from tariffs. It is a new gesture of goodwill towards Washington, before trade negotiations are resumed in October, but that is also the result of domestic interest: the price of pigs, the meat par excellence in this country, has skyrocketed almost 50% and it has already begun to affect the cost of the rest of the food and the family economies.
Beijing, one of the main markets for both products, in July 2018 had imposed 25% tariffs on pork and soybeans from the United States. As part of the escalation of sanctions announced this summer, since September 1, these rates had increased by 5% for seeds, 10% for pigs. The sum of the successive rises had raised tariffs on the price of this American meat to 72%. "China supports the relevant companies buying certain quantities of pork, soybeans and other agricultural products as of today (this Friday), in accordance with the market principles and the rules of the World Trade Organization," he announced. the state news agency Xinhua.
Beijing and Washington have exchanged conciliatory gestures throughout this week, in anticipation that a meeting will be held between lower-level commercial officials from both countries. These conversations will prepare the meeting that the main negotiators have planned in Washington in the first days of October.
On Wednesday, China had announced that 16 types of products it imports from the United States will be exempted for a year and starting next week from the 25% tariffs that had been imposed on them in the trade war. Among those goods are medications, lubricants or pesticides. For his part, the president of the United States, Donald Trump, declared a delay of two weeks to apply the increase of tariffs to 30% on about 250,000 million dollars in purchases from the Asian country. Instead of applying that increase since October 1 – a strategic date, as China celebrates that 70th anniversary of the founding of the People's Republic that day – it will be done on the 15th of that month. Trump added that while he wanted an exhaustive agreement with the government of President Xi Jinping to end the trade war that confronts both colossi for a year and a half, he did not rule out a temporary commitment.
"The Chinese market has a large capacity, and the prospects for importing high-quality agricultural products from the United States are wide," says the Xinhua text. "It is expected that the United States will keep its word and realize its promise to create favorable conditions for cooperation in the agricultural area between the two countries," he adds.
Before announcing the tariff exemption, China had already suggested that this possibility was raised: this Thursday it bought ten shipments of soybeans from US producers. The gestures that both parties have had pretend that the negotiations take place in a climate of less tension. But also limit the economic impact of the dispute.
In China, swine fever has decimated the national pig herds, and has triggered alarming levels the price of this meat. A kilo now costs between 30 and 33 yuan (around 4 euros), twice as much as in July. Something of concern for the Government of Xi, in a country where pigs represent 60% of the total meat consumed. The cost of this food is, historically, one of the factors that families take into account to consider their economic well-being, and an increase of this magnitude represents a tragedy in the streets. According to experts, if no measures were taken, the increases would continue runaway until the Chinese New Year – when tradition makes it essential to eat this meat in the festivities. The escalation has dragged the entire food sector, which registered an increase of 10% in August.
Chinese Prime Minister Li Keqiang has called for an "urgent attitude" to address the problem, which has forced some regional governments to resort to the strategic pork stock to try to keep prices under control and has made imports from Brazil and the European Union skyrocket.
According to the American Federation of Meat Exporters, although affected by tariffs, sales of pork from this country to China were 68,657 metric tons in July, more than triple a year earlier, and the value grew 173%, to reach at 152.5 million dollars. Between January and July, sales grew 23% in volume (292,666 metric tons) and 3% in value (580.3 million dollars).
China's announcement comes a day after the country's main trade negotiator, Deputy Prime Minister Liu He, met in Beijing with the president of the US and China Trade Council (USCBC), Evan Greenberg. In addition to confirming the meeting next week of the working groups, Liu wanted to show an optimistic attitude: "The whole world expects to see progress in trade consultations between China and the United States," said Liu, quoted by Efe.