The Chinese Foreign Ministry has announced it will lift tariffs on some U.S. soybean and pork exports to the country, but no specifics have been released. The two countries have been involved in a trade war for almost a year and a half, and the according to a statement from the Chinese government, the lifting of some tariffs is a step towards negotiating a trade deal to end the impasse.
China imposed 25% tariffs on soybeans, pork, and other products in response to billions of dollars in tariffs imposed on Chinese products by the Trump Administration. President Donald Trump has accused the Chinese of unfair trade practices and is threatening to level billions of dollars of new tariffs on Chinese imports to the U.S. later this month.
A relaxing of the pork tariffs could have been predicted. Earlier this year, outbreaks of African swine fever, reported in China, Cambodia, Vietnam and Europe, were reported. The disease is incurable and has an almost 100% mortality rate. One projection forecast that 200 million hogs could be culled due to the disease.
Soybean exports from the U.S. to China have been one of the most contentious aspects of the trade war. Before the economic conflict, China imported about $14 billion worth of U.S. soybeans each year. Only a fraction of that is now being imported and it has caused record numbers of soybeans to be stored in the U.S.
Soybeans are the top crop in Arkansas, and the export war has drastically changed farming habits in the Natural State. An estimated 3.6 million soybean acres were planted in 2018 and that number dropped to 2.6 million in 2019, according to the United States Agriculture Department. Farmers have switched to other crops such as corn to minimize potential losses.
Gov. Asa Hutchinson has repeatedly called on the Trump Administration to negotiate a deal and end the trade war. When asked by Talk Business & Politics last month if the Trump trade war has resulted in any irreversible damage to the Arkansas economy, Hutchinson said he has continually expressed concern to federal officials that the ongoing business uncertainty would eventually hurt Arkansas and U.S. economic fortunes but there is still work to be done.
“There are some very legitimate issues that the U.S. has to have addressed, one is transparency enforcement, protection of intellectual property rights and that is not only a concern in the United States but is also with companies in Japan,” Hutchinson said.
“I don’t believe it has been irreparable in terms of Arkansas. I think there has been a slowdown of investment opportunities because of the uncertainty, but if this could be wrapped up in a favorable way, then Arkansas should be first in line to capitalize on investment,” he said.