Beijing - China on Friday confirmed that it
will waive import tariffs for some soybeans and pork shipments
from the United States, as the two sides try to thrash out a
broader agreement to defuse their protracted trade war.
The tariff waivers were based on applications by individual
companies, the finance ministry said in a statement, citing a
decision by the country's Cabinet without specifying the
quantities involved.
Several industry sources in the United States and China
interpreted the announcement as official confirmation of duty
exemptions on up to 10 million tonnes of soybeans and an unknown
volume of pork sources said were offered to importers earlier
this year.
"There's nothing that's saying this is some big addition to
what's been out there," said Matt Wiegand, commodity broker for
FuturesOne in Lincoln, Nebraska.
China had imposed levies in response to tariffs launched by
Washington over allegations that China steals and forces the
transfer of American intellectual property to Chinese firms.
Tariffs on U.S. soy imports are currently 33% while levies on
pork are up to 72%.
Importers with duty-free quotas have been required to pay
the tariffs and later apply for refunds, a process that traders
said caused delays in unloading shipments. Friday's announcement
appeared to remove that step, industry sources said.
The announcement did not trigger new U.S. soy purchases on
Friday, three U.S. soybean exporters said, although soybean
and hog futures firmed on the news.
The waivers come amid negotiations to conclude a 'phase one'
deal to de-escalate a 17-month trade war that has roiled
financial markets, disrupted supply chains and weighed on global
economic growth.
Though President Donald Trump struck an upbeat tone on
progress in talks on Thursday, a new round of U.S. tariffs
covering about $156 billion of Chinese imports is set to kick in
just over a week on Dec. 15.
"The goal (of this move) is to expand purchases and reassure
the United States," said a Chinese source who advises Beijing on
the trade talks but declined to be identified because of the
sensitivity of the matter.
Beijing's levies on U.S. soybeans initially brought its
purchases of the United States' most valuable farm export to a
virtual halt, although it has offered waivers to buyers in
recent months as the U.S. crop was harvested.
The Chinese government never made the details of these
waivers public, however.
It is not clear how much U.S. soy China will buy in coming
months as the Brazilian harvest looms, said Darin Friedrichs,
senior Asia commodity analyst at INTL FC Stone.
Exemptions for pork are likely to be in higher demand, with
less than two months until China's Lunar New Year holiday, the
country's peak consumption period.
China has been scouring the world for more meat to fill a
big shortage of protein after an outbreak of African swine fever
devastated its massive hog herd, cutting supplies of pork.
A second adviser to the Chinese government said exemptions
on the products suited Beijing, as they helped meet market
demand for such goods while reducing the trade surplus with the
United States.