China Extends Suspension Of Extra Tariffs On US Goods

Beijing : China announced on Wednesday that it will extend the suspension of additional tariffs on US goods for a year, formalizing the agreement reached during talks between presidents Xi Jinping and Donald Trump last week. The two leaders held talks in South Korea in late October that effectively extended a fragile ceasefire by a year, following several rounds of trade talks in recent months.

“The 24 percent tariff on US goods will continue to be suspended for one year (and) the 10 percent tariff on US goods will remain,” said a statement published on the Ministry of Finance website on Wednesday, citing Beijing’s State Council. The statement stated that the pause follows the “consensus reached in China-US economic and trade consultations” and will be effective from November 10.

On Tuesday, Trump formalized an agreement under which Washington will reduce additional tariffs on Chinese imports from 20 percent to 10 percent, also effective November 10. Temperatures have risen between the world’s two largest economies this year as Washington and Beijing impose increased tariffs on each other’s products. At one point, tariffs on both sides reached triple digits, hindering trade.

The two have been in an uneasy truce as top economic leaders have met several times for talks in recent months and tensions have risen over export controls and other issues. Beyond the statement covering general tariffs, China also issued several statements on Wednesday suspending related measures affecting different sectors.

In one of them, China said it would “stop imposing additional tariff measures” imposed by an order hitting a list of American agricultural products in March. The move came in response to Trump doubling down on additional tariffs on Chinese goods due to Beijing’s use of fentanyl; This rate decreased to 10 percent as of next week.

Beijing had imposed a 15 percent additional tax on chicken, wheat, corn and cotton imported from the United States, and a 10 percent additional tax on American soybeans, pork, beef, dairy products and other farm products. This had damaged a key source of Trump’s political support: farmers. More than half of U.S. soybean exports last year went to China, but Beijing halted all orders as the trade dispute deepened.

‘The ties are being dissolved’

In a sign that relations are thawing, Chinese Vice Minister of Commerce and chief negotiator Li Chenggang praised “significant” agricultural trade links between the countries during a meeting with representatives from the US agricultural sector in Beijing on Tuesday. “It is hoped that the United States can work together with China, look at the big picture, and create a favorable atmosphere for pragmatic cooperation in agriculture and other fields,” Li said at the meeting, according to a statement from China’s commerce ministry on Wednesday.

Beijing’s Ministry of Commerce also announced Wednesday that it would extend suspensions of export control measures imposed on U.S. entities during the tit-for-tat escalation with Washington earlier this year. In another statement, the ministry said that restrictions on dozens of US defense and aerospace companies will continue to be suspended.

The purpose of these measures was to limit US access to “dual-use” products that could be used for both civilian and military purposes. Following talks, Beijing agreed to halt restrictions on rare earth technology exports for a year. Rare earths are a strategic area dominated by China and are essential for production in the defense, automobile and consumer electronics sectors.

China’s Ministry of Commerce said Washington had agreed to suspend for a year a move to impose “Entity List” export restrictions on subsidiaries of blacklisted foreign companies in which it holds at least a 50 percent stake.

The United States also said it would pause for a year measures targeting China’s shipbuilding industry that have led to both sides imposing port fees on each other’s ships. In response, China would suspend its “countermeasures” for a year after the US action, they added.