China grain traders await lower tariffs before US return
China will need to drop steep tariffs it imposed on a range of American farm products earlier this year before it can fulfill its pledge to buy substantial volumes of U.S. goods, said Chinese traders on Monday.
China and the United States agreed on Saturday to a ceasefire in a months-long trade war that has roiled global markets and halted sales of U.S. soybeans to the world’s top buyer.
The United States agreed to put on hold a scheduled increase in tariffs on $200 billion of Chinese goods due to come into effect on Jan. 1, following talks between U.S. President Donald Trump and Chinese President Xi Jinping at a gathering of world leaders in Argentina.
The White House said Beijing had promised to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, with purchases of farm goods to start “immediately.”
But no substantial purchases can happen with a 25 percent duty still in place on U.S. soybeans, corn, sorghum and wheat, said buyers and analysts.
“How can you buy U.S. products if China does not reduce the tariffs? We haven’t made any move yet,” said a trader with a major Chinese trading house. He declined to be identified as he was not allowed to be quoted by media.
China’s tariffs on U.S. soybeans mean they are $60 per tonne more expensive than those from top global supplier Brazil, which is due to begin harvesting a record crop in a few weeks time.
Muted reaction in both the Chicago and Dalian futures markets on Monday underlined the lack of incentives for new purchases. [GRA/]