China just removed tariffs from some American exports - but ranchers are still going to feel the pain as farm produce still faces levies
- China's Foreign Ministry announced on Wednesday morning that it would be removing tariffs from certain American exports.
- The total number currently is 16, including some foodstuffs and lubricants, according to Bloomberg.
- But American farmers will still feel the strain of the trade war as "big ticket" agricultural goods like soybeans and pork haven't been included.
- Experts are also warning not to look too much into the news, saying that the tariff exemption could be more to benefit China domestically than to offer an olive branch ahead of trade negotiations.
- Hong Kong's Hang Seng index rose 1.6% on the news.
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China on Wednesday morning announced it would remove tariffs from 16 types of American exports ahead of talks between the two superpowers next month.Starting September 17, Bloomberg, citing a report in Chinese from the the state news agency Xinhuanet, said the country will suspend tariffs for a year on cancer drugs, some food, lubricants, and chemicals.
The Chinese Foreign Ministry also said that further exemptions will be announced in due course, Bloomberg reported.Despite the tariff exemption, America's farmers are still going to feel the squeeze of the trade war, which has already seen the number of farming bankruptcies rise in the last year, as agricultural goods such as soybeans and pork are still facing the high levies.
Julian Evans-Pritchard, senior China economist at Capital Economics, said that these tariff exemptions shouldn't be looked at with a great deal of hope in terms of softening the conflict."Looking at what goods have been exempted, it could more be the case that removing these tariffs would benefit China domestically, as there are no big-ticket agricultural goods on the list," said Evans-Pritchard to Markets Insider in a call. "In terms of the trade war, it won't meaningfully alter negotiations as if you look at the last round of talks they fell apart quite quickly over basic things like US agricultural exports, let alone the more complex stuff like intellectual property ownership," he added.
Agricultural exports from the US have plummeted during the course of the trade war, as China is one of America's main export markets - in particular for soybeans and pork.
According to The American Farm Bureau, the US exported roughly $19.7 billion worth of agricultural goods to China in 2017. In 2018 that figure fell to $9.1 billion, and exports to China were down by a further $1.3 billion during the first half of 2019.Hong Kong's Hang Seng rose 1.6% at the close, while the yuan edged up against the dollar marginally.
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