China has taken several aggressive steps to lower trade tensions with the US. It has reestablished import licenses for three U.S. companies and eliminated tariffs on a selection of U.S. agricultural products. This is an important development in the context of a long string of increasing trade restrictions that started at the beginning of this year.
In March, China announced tariffs on multiple U.S. agricultural products in retaliation for its ongoing agricultural trade war that has hurt farmers all across America. The U.S. implemented an import ban on logs. This decision followed President Donald Trump’s order for a Section 201 investigation into lumber imports on March 1st. As a result, the bilateral trade relationship between the two countries was put under tremendous stress, hampering agricultural trade.
Recent developments suggest a new chapter of a China more willing to go on the offensive. The country has recently started making more substantial buys of American agricultural commodities, including two cargoes of U.S. wheat. This represents a significant turnaround from the administration’s earlier import constraints. In addition, China has recently removed tariffs on a number of U.S. agricultural commodities, suggesting a warming of the icy relations between the two powers.
Despite these positive developments, experts warn that the current 10% tariff on all U.S. imports, including agricultural products, continues to limit expectations for a broader recovery in trade flows. The tariff inequitably penalizes American exporters by placing the bulk of the burden on them. This creates additional challenges to increasing agricultural trade between the two countries.
Beyond the restoration of soybean import licenses for three American companies, China has started buying U.S. soybeans again. This is an important step for both countries’ economies, as soybeans are among the United States’ largest export commodities. Workers offloading a truckload of soybeans into an elevator pit in Ohio, 2021. This event emphasized just how difficult American farmers suffered during a period of heightened trade hostility.
China’s recent moves confirm that China appreciates how important agricultural trade is. They understand the value of making collective progress alongside other parties. Today, both nations are continuing to work through the ebbs and flows of international commerce. If fully realized, these actions will restore trust and pave the way for deeper economic engagement.