U.S-China Trade Talks: China Confirms to Waive the Tariffs on Soybeans

Ever since the tariff imposition on China by U.S President Donald Trump in 2018 which sparked the beginning of a trade war between the two nations. Beijing and Washington do not see eye to eye in talks related to trade, this has also lead to heightened tensions between the two nations.

The Biden administration wants to peacefully end the trade war which was initially started by the Trump administration via the imposition of section 201 tariffs, which were applied on solar panels and washing machines.

On January 15, 2020, the phase 1 agreement was made between China and the U.S in which China had pledged to increase imports from the United States and also to buy over $200 billion more in goods and services in the years 2020 and 2021.

According to the U.S census bureau, china has fallen short of 36.5 billion dollars worth of purchases for the year 2020 by around 7.75 billion dollars.

China said that it pressed the United States to eliminate the tariffs in talks between the countries’ top officials; the Chinese ambassador to the United States Cui Tanaka told the press that Beijing wants the U.S to drop the restrictions and sanctions against its companies outlining one of its demands for future talks.

The Trade War Proceeds in Five Stages Between 2018 & 2021

• First 6 months of 2018- Moderate increase in tariffs (U.S tariffs on Aluminium & Solar Panels and china’s retaliation towards it.

• July- September 2018- Sharp increase in tariffs on both sides (basically a trade war on the imposition of tariffs broke out) U.S average tariffs increased from 3.8% to 12.0%, and China's average tariffs increased from 7.2% to 18.3% .

• In stage three, there was 8-month period (September 25, 2018, through June 2019)( china even dropped some tariffs on the U.S with little change in tariffs.

• From June to September 2019, another set of tariff increases kicked in.

• In the current stage five, and despite the phase one agreement, tariffs between the two countries remain elevated & are the new normal.

Last week U.S ambassador Katherine Tai told the press that she plans to have interim trade talks with China to resolve the trade war between the two nations.

Tai also stated that she would begin talking with her Chinese counterparts in the upcoming talks about china’s failure to live up to its obligations as per the phase 1 trade agreement signed in January 2020. In a call with reporters, the senior administration officials of the Biden administration also did not rule out the possibility of imposing further tariffs on China if the trade talks did not produce the desired results.

Conclusion:

China confirmed to waive the tariffs on soybeans and pork shipments from the United States as a sign of goodwill to hash out a solution to end the trade war between the two nations.