The stock market rejoiced last week when it emerged that the U.S. and China are close to signing a limited trade deal, but it appears that the celebrations arrived a bit too early. President Donald Trump has already issued a threat to China that tariffs could jump significantly if a deal is not signed, and now, yet another issue has put the brakes on a potential trade agreement between the two countries.
The Wall Street Journal reports that China is non-committal over the amount of pork President Trump wants Beijing to purchase from the U.S. According to WSJ, Trump has already announced that China will buy $50 billion worth of pork, soybeans and other agricultural items from the U.S. every year. However, Beijing doesn’t want to put a number on how much it plans to import from the U.S.
China’s unwillingness to formally commit a number in the agreement is a potential roadblock to the trade deal. Beijing wants to have the flexibility and doesn’t want to sign a trade deal that looks favorable to Trump and the U.S. In fact, people familiar with the matter say that China could stop importing pork and other products from the U.S. in case tensions rise again between the two countries.
This is not surprising as I had already reported that the actual signing of a trade deal between the U.S. and China is faced with a ton of uncertainties, and pigs are just one of them.
It is being reported that the U.S. and China are at odds over the extent to which Trump is going to cancel tariffs on Chinese goods. According to Chinese commerce ministry spokesman Gao Feng:
China has emphasized many times that the trade war began with additional tariffs and should end with the cancellation of additional tariffs.
This means Beijing wants Trump to lift the 15% tariffs he imposed on Chinese goods worth $112 billion back in September. This would be in addition to the suspension of the 15% tariffs that are set to come into effect on Dec. 15, which would impact $160 billion worth of goods, such as smartphones and laptops.
What’s more, it has been reported that Beijing wants Trump to reduce the 25% tariffs imposed on certain other types of goods as well. Now, the U.S. is giving China tariff exemptions on goods that were slapped with duties on Sept. 1 this year, but it has been reported that Beijing wants more for a trade deal to go through.
On the other hand, it appears that Donald Trump has gone back on his promise to lift trade war tariffs imposed on China.
The South China Morning Post quotes Trump as saying:
“They’d like to have a rollback. I haven’t agreed to anything.”
“China would like to get somewhat of a rollback, not a complete rollback, because they know I won’t do it,” he said. “Frankly, they want to make a deal a lot more than I do.”
This is yet another indication that the impasse between the U.S. and China is far from getting solved. Trump’s haughty approach and China’s refusal to accept a deal that would appear favorable to the U.S. are big roadblocks that are coming in the way of an amicable resolution.
Last modified: September 23, 2020 1:17 PM