This comes just after China announced that it would resume soybean import licenses for three U.S. firms. This recent announcement marks a glimmer of hope for improved trade relations between the two countries. This apparent rapprochement comes just days after Beijing lifted tariffs on some U.S. ag exports — tariffs set in retaliation for other tariffs imposed earlier this summer. A 10% increase in tariffs on U.S. imports — including agricultural products — remains. This punitive tariff still casts a shadow over the prospect of a complete rebound in trade flows.
With the issuance of these renewed soybean import licenses, it becomes clear just how dependent China remains on such U.S. agricultural products. Soybeans are a historically critical import for the mercantilist nation. Apart from soybeans, China has made limited – and likely symbolic at this point – purchases of other American farm products, such as two cargoes of U.S. wheat. This change signals a careful, but hopeful step towards improving agricultural trade.
At the start of March, the U.S. government began imposing tariffs on a growing list of Chinese goods that led to retaliatory actions from Beijing. Under heavy pressure in response to President Donald Trump’s order for an International Trade Commission investigation into unfair lumber imports, China blinked. This situation stopped all imports of U.S. logs. This measure was an excellent illustration of the complicated and sometimes inflammatory U.S.-China trade relationship.
Traders remain wary despite these recent developments. The persistent 10% tariff on U.S. imports continues to limit overall hopes for a full-fledged trade flows recovery. Analysts are looking at positive indicators of rising agricultural trade. Perpetuating tariffs add unnecessary layers to the conflict and may stifle progress on a negotiated resolution from going even further.
China’s decision to lift tariffs on some U.S. farm goods imposed in March indicates a possible willingness to ease tensions and foster better trade relations. The current tariffs pose a significant obstacle. That hardly seems like a sustainable trend of accelerating trade growth between the two nations.
Today, both countries are firmly in control of their tricky trade balancing act. Together, these tariff policies heavily influence U.S. traders and consumers. Further conversations and modifications will be important for both parties. They need to do a better job of managing their economic development interests and addressing the root community grievances.