Some news from the trade war front. China has decided to exempt pork and soybeans from future tariffs, giving a much needed reprieve to the agricultural sector in the United States. There was joking last week when China lifted tariffs on a few inconsquential items that it was an “olive twig,” but this move signals something bigger.
Via Reuters.
SHANGHAI (Reuters) – China will exempt some agricultural products from additional tariffs on U.S. goods, including pork and soybeans, China’s official Xinhua News Agency said Friday, in the latest sign of easing Sino-U.S. tensions before a new round of talks aimed at curbing a bruising trade war.The United States and China have both made conciliatory gestures, with China renewing purchases of U.S. farm goods and U.S. President Donald Trump delaying a tariff increase on certain Chinese goods.
This is likely happening for reasons related to China’s condition, not as a gesture of good will. China would like nothing more than to stick it to us but they rely on our agricultural products to keep their people from starving.
An outbreak of deadly African swine fever, which has cut China’s pig herd by a third since mid-2018, has propelled Chinese pork prices to record levels and left the country in need of replacement supplies from overseas. U.S. pork exports to China so far this year have largely fallen short of expectations.
That issue of diseases didn’t just come out of nowhere. It is a result of China sourcing unsafe Russian pork to try to replace what we were selling them. In other words, China needs us and they are starting to feel the pinch. Hence, they lifted these tariffs because they need the imports, not just to be nice.
It’s disappointing that just last week I saw some conservatives on Twitter snarking that Trump should retreat and declare victory. That’s short sighted and stupid. It’s exactly the kind of attitude that got Trump elected, i.e. the idea that Republicans aren’t willing to fight the tough battles. Trump is winning this trade war. For now, the U.S. has been largely left unscathed, with the markets already rebounding big after a scare a few weeks ago. The question is whether Trump can finish this before 2020. This isn’t something he’s going to want hanging over his head. That’s the only wildcard in this.