Chinese firms ask for tariff exemptions to buy US agricultural products, state media says

23-Jul-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

Several Chinese companies want to buy American agricultural products and have applied for exemptions from the tariffs imposed on them by Beijing, state media reports.

The applications for exemptions have been filed and will be heard by a panel of experts from the government, Xinhua reported on Sunday. The report did not say how long the review of the requests would take.

The report did not name any of the companies or say what products they wanted to buy, but said the move was the result of an agreement reached between Chinese President Xi Jinping and his US counterpart Donald Trump when they met last month in Osaka, Japan on the sidelines of the G20 summit.

The report also cited Trump’s promise to suspend the imposition of new tariffs on Chinese goods and allow US firms to sell products to “relevant Chinese companies”, in an apparent reference to telecoms giant Huawei.

The Xinhua report also noted that the Trump administration announced on July 9 that it would exempt 110 Chinese products from medical equipment to key electronic components from import tariffs.

The announcement of new Chinese purchases of US farm products came only a few days after Trump complained that China was not living up to promises made at the summit to increase its agricultural imports from the US, and renewed his threat to impose further trade tariffs if necessary.

Analysts were initially cautious in their assessment of whether Chinese purchases of US agriculture products would prove to be the breakthrough needed to restart formal talks to end the trade war, which is now more than a year old.

Shi Yinhong, a US-China ties specialist with Renmin University and an adviser to the State Council of China, said China’s move to buy more US farm products was helpful but “not decisive”.

China cannot promise to meet all the demands made by Trump, but Beijing does not want to appear too hard-line

Shi Yinhong

“China cannot promise to meet all the demands made by Trump, but Beijing does not want to appear too hard-line,” he said. “This is a flexible move that might dissolve some of the US demands and could help with the talks.”

Lu Xiang, a US specialist with the Chinese Academy of Social Sciences based in Beijing, said that while the Chinese agriculture product purchases were a positive sign for bilateral ties, it was still too early to judge what they would lead to.

“It’s a delicate move and certainly a positive interaction between the two sides, that China is responding to US moves to exempt certain tariffs,” Lu said. “But since the current US administration is still very unpredictable, we cannot read too much into the sign… it is still not sure even when the trade talks could resume.”

But Hu Xijin, editor-in-chief of Chinese state newspaper Global Times, said in a tweet on Sunday that the Chinese agriculture purchases would indeed lead to a resumption of the trade talks.

“Based on what I know, Chinese importers have started arrangement of purchasing US agricultural products. This is a prominent part from Chinese side as the two countries have signalled goodwill to each other recently. It also indicates China-US trade consultations will restart soon,” Hu said on Twitter.

China had insisted that Washington follow through with Trump’s promise to ease the ban on US companies selling components and equipment to Huawei, while Trump had insisted that China buy more US farm products, as he said China had agreed to do.

Reuters reported last week that the US Commerce Department expected to begin issuing licenses within two weeks to allow US companies to sell products to Huawei that did not jeopardise US national security.

Last week, China made its biggest purchase of US sorghum since April, according to US Department of Agriculture data. The world’s top sorghum importer bought 51,072 metric tonnes of the grain even though China imposed a 25 per cent tariff on American shipments in July 2018 as part of the tit-for-tat trade dispute.

It is unclear if it is the tariff on this purchase that Chinese companies are asking Beijing to waive.

Chinese and US trade negotiators have talked twice by phone since Xi and Trump reached agreement on a tariff ceasefire and other arrangements to allow trade talks to resume. However, a date and place for a resumption of formal negotiations has not yet been announced.

Even when formal talks resume, long and difficult negotiations are expected before a deal to end the trade war can be reached. The US is insisting that talks be based on the 150-page document that included certain Chinese concessions prior to the breakdown of talks in early May, while China wants to include its demands in a revised text.


Category: China

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