China has announced relaxations in barriers on a variety of American agricultural products. It reestablished soybean import licenses for three American firms and removed tariffs on certain agricultural products. Now a more permanent, though still crazy, 10% tariff on all U.S. imports. This tariff continues to impact agricultural products disproportionately.
Beijing’s recent choice to remove some tariffs on U.S. agricultural products comes after a series of escalated trade disputes. In March, the Chinese government stopped accepting imports of U.S. logs. They did this in retaliation to a Section 232 investigation that former President Donald Trump initiated into importing lumber. The freeze was yet another blow in the ongoing and intensifying trade war between the two countries.
In a welcome, if halfway move, China started making some of those State Reserve purchases from the U.S., including a pair of cargoes of U.S. wheat. These purchases signal a potential thaw in relations, as the Chinese market seeks to stabilize its agricultural supply amid ongoing global disruptions.
Those restrictions have mostly been lifted, but the general 10% tariff on all U.S. imports is still in place. This extends to agricultural products too. This tariff is a product of previous trade bartering. Leaving aside the intellectual property and other systemic issues, this indicates that while we’ve achieved something, there are still big hurdles in the U.S.-China trade relationship overall.
China’s announcement to extend soybean import permits to three American companies is a smart move. This move comes as part of Vietnam’s plan to diversify its sources of agricultural imports. This decision might be an indicator of China’s long-term resolution to improve food security, despite all the complexities of international trade.