China to buy more ag products, but tariffs remain
December 3, 2018
Chinese President Xi Jinping has agreed to buy an unspecified amount of U.S. agricultural products as part of an agreement with President Donald Trump not to escalate the U.S.-China trade war, but there are no signs that the retaliatory tariffs that China has placed on U.S. farm products will be removed.
Trump, in turn, promised not to increase U.S. tariffs on Chinese products, but the deal is good for only 90 days. If China does not make concessions on Chinese policies to which Trump has objected he then plans to increase the tariffs on Chinese goods from 10 percent to 25 percent, according to media reports.
In a statement released after the dinner with Xi on the sidelines of the Group of 20 meeting in Buenos Aires, White House spokeswoman Sarah Huckabee Sanders said, "On trade, President Trump has agreed that on Jan. 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10 percent rate, and not raise it to 25 percent at this time."
"China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately," Sanders said.
"President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent."
During a gaggle with reporters on the plane coming back from Buenos Aires, Trump said, "It's an incredible deal. It goes down, certainly — if it happens, it goes down as one of the largest deals ever made. It's a deal between the United States and China made by the president and the president. And it'll have an incredibly positive impact on farming, meaning agriculture, industrial products, computers — every type of product.
Recommended Stories For You
"And what I'd be doing is holding back on tariffs. China will be opening up. China will be getting rid of tariffs. You know, China right now has major trade barriers — they're major tariffs — and also major non-tariff barriers, which are brutal. China will be getting rid of many of them. And China will be buying massive amounts of product from us, including agricultural from our farmers — tremendous amount of agricultural and other products."
American Soybean Association President John Heisdorffer, a grower from Keota, Iowa, said, "This is the first positive news we've seen after months of downturned prices and halted shipments. If this suspension of tariff increases leads to a longer-term agreement, it will be extremely positive for the soy industry. We want to begin repairing damage done to our trade relations with China, which has been essential to successful soybean exports for years."
"During the 90-day negotiating period, ASA hopes to see China reopen its market to significant U.S. soybean imports as a key confidence-building step that will help restore our trade relationship," Heisdorffer said. "This is an important opportunity to demonstrate positive momentum that will strengthen efforts on both sides to restore economic relations that are mutually beneficial."
Farmers for Free Trade Executive Director Angela Hofmann said, "Any signal, even if temporary, that this trade war may de-escalate is welcome news for farmers. While farmers are cautiously optimistic about this development, they are also keenly aware that they are still subject to the existing painful retaliatory tariffs and lost markets that have hurt their recently harvested crops and income."
"American farmers are results oriented and are hopeful that all parties will quickly resolve the trade war so they can regain markets that are decades in the making.
"In the months ahead, Farmers for Free Trade will continue traveling across the country to hear from farmers and to amplify their voices in Washington, D.C. The voices of American farmers have helped to create the pressure needed for any progress in easing trade tensions. Further progress will continue to require their stories and their advocacy."
Former Rep. Charles Boustany, R-La., a spokesman for Tariffs Hurt the Heartland, a broader pro-trade group, said, "Agreeing not to raise tariffs on American businesses, farmers and consumers is an encouraging first step."
"These tariffs are taxes that Americans pay, and avoiding a massive tax increase on Jan. 1 is welcome news that must be followed up by rolling back the tariffs currently in place," Boustany said.
"Tonight's announcement makes clear that the administration has heard the stories of economic hardship from Americans who have been hurt by tariffs. Our campaign will continue to tell their stories as the administration enters into this important negotiation period."
The Business Roundtable said its members hope the agreement "will lead to both important reforms in China and a de-escalation in trade tensions between the U.S. and China."
"China's trade and investment practices have prevented U.S. companies from competing on a level playing field and hurt U.S. workers," the group said. "The administration is right to demand reforms that liberalize the Chinese market and ensure fair treatment of U.S. companies."
But the group also urged the administration to continuing working with Japan and the European Union "to seek sustained progress on these long-standing problems with China." ❖