China announced Wednesday it was extending for one year a suspension of some tariffs imposed on American goods at the height of the trade war to keep them at 10%, a new sign of appeasement between the world's two leading economic powers.
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China will also “stop applying additional tariffs” imposed on soybeans and several other US agricultural products since March, measures that have hit hard in circles favorable to President Donald Trump.
China is fulfilling commitments made by Chinese and U.S. Presidents Xi Jinping and Donald Trump on Oct. 30 in South Korea during a summit aimed at easing months of tension that has strained the global economy.
She did so a day after Mr. Trump signed an executive order cutting customs duties levied on many Chinese goods from 20% to 10% to impose sanctions on what the United States criticizes as China's inaction on fentanyl trafficking.
The review will take effect on Nov. 10, along with measures announced Wednesday by China, which made clear after the Oct. 30 summit that it would act in line with what the United States would do.
“Customs duties of 24% on American goods remain suspended, and customs duties of 10% on American goods remain in force,” states a press release published on the Treasury Department website.
In April, China announced additional tariffs of 34% on American products in response to new US tariffs on Chinese exports. In May, she reduced them to 10%.
In March, China also decided to impose tariffs of 10% on American products such as soybeans, pork or beef, and an additional tariff of 15% on chicken, wheat, corn or cotton.
She was reacting to tariffs imposed by Trump a few days earlier over fentanyl. China is the main source of the precursor chemicals used to produce this extremely potent opioid that is causing a serious health situation in the United States.
A fragile truce
Mr. Trump has fanned the embers of a trade confrontation already underway during his first term since returning to the White House in January, citing trade imbalances, intellectual property theft and even national security risks. In mid-April, U.S. tariffs on Chinese goods reached an average level of 164%, according to a congressional report.
China reciprocated not only with its rights, but also with restrictions on rare earths. China is the world's leading producer of rare earth elements needed for digital technology, cars, energy and even weapons, and has vital leverage here.
Mr Trump has fanned or cooled trade tensions in a series of rounds of talks between US and Chinese negotiators.
The measures announced Wednesday in Beijing follow “the consensus reached during economic and trade consultations between China and the United States,” China's Ministry of Finance said.
These consultations paved the way for the November 30 summit, which signaled at least a temporary détente.
On the same day, China announced it would suspend for a year the increased restrictions it had recently imposed on rare earth elements. The restrictions have angered Trump, as well as unrest in the European Union and Japan, and increased pressure on supply chains.
Economists, however, warn that the October 30 trade truce is fragile.
