September 19, 2019
The United States and China will re-start trade negotiations this week after an exchange of modest, but conciliatory, steps. China excluded a few U.S. products from its retaliatory tariffs, then announced tariffs on soybeans, pork and other farm products would be removed. At the same time, President Trump announced that a further increase in tariffs on Chinese goods, planned for Oct. 1, would be delayed two weeks so as not to coincide with China’s celebration of the 70th anniversary of the People’s Republic.
China made some new soybean purchases, though the amounts were small compared to the traditional level of Chinese soybean imports. Nevertheless, most observers saw the signs as positive. What remains in serious doubt is whether China will fundamentally change its policies and practices on technology transfer and intellectual property, the key drivers of the U.S. tariff war.
Already, some trade analysts have begun to predict a face-saving accord that might not involve much more than each side removing the punitive tariffs imposed over the past year. For U.S. agriculture, that would be a victory but would call into question whether all the economic damage had really led to any changes in the long-term economic relationship.
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