December 10, 2019
China plans tariffs waiver on US swine and soybeans as goodwill gesture
The waiver comes as both the United States and China are discussing a broader phase one agreement to end the 17-month trade war between both nations, reported Reuters.
China's finance ministry said the tariff waivers were based on applications by individual companies. The decision comes from China's cabinet and no detailed quantities were announced.
US and China industry sources believe this is an official confirmation of tax exemptions proposed to importers this year –up to 10 million tonnes for soybeans, in addition to exemptions on swine without specific numbers.
Current tariffs on soybean imports are 33%, while swine is up to 72%.
Currently, importers who bring in goods with duty-free quotas must still pay tariffs first, then apply for refunds. This process has caused shipment unloading delays, but this new announcement by China's Finance Ministry will remove the refunding step from the process.
Soybean and hog futures remained firm after China's Finance Ministry statement.
Fresh US tariffs on Chinese imports worth U$156 billion will be enforced on December 15, 2019, even as US President Donald Trump spoke positively regarding talks on the US-China agreement.
While US swine will be in high demand due to the upcoming Chinese New Year celebrations, Darin Friedrichs, senior Asia commodity analyst at INTL FC Stone said Brazil's soybean harvest may put a damper on US soybean exports to China.