China agreed to buy 200 Boeing jets and resume imports of some U.S. beef products, in one of the clearest signs yet of easing trade tensions following last week’s summit between President Donald Trump and Chinese leader Xi Jinping.
China’s Ministry of Commerce reported that teams from both countries had in-depth discussions on tariffs last week and agreed on recommendations on bilateral tariff measures, according to an official statement released on Wednesday.
The ministry said it expects the US to fulfill its commitments and ensure that tariffs on Chinese products do not exceed the levels agreed at the October meeting in Kuala Lumpur. He also stated that he hopes that Washington will move forward, in future rounds of negotiations, in removing unilateral tariffs applied to China.
The two countries agreed in principle to discuss a framework for reciprocal tariff reductions on products of equivalent value within a trade council, with each side including goods worth at least $30 billion.
According to the ministry, products approved by both parties may eventually be taxed at most favored nation (MFN) rates or lower.
If the two countries reduce tariffs on about $30 billion worth of goods, that would cover roughly 10% of U.S. imports from China, according to Zhiwei Zhang, an economist at Pinpoint Asset Management. For him, the volume is not enough to change China’s growth projection embedded in the markets, but it represents a step in the right direction.
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“As long as the two countries maintain dialogue to stabilize bilateral relations, this is good news for global investors,” Zhang said.
The ministry also reported that the parties reached several understandings to address non-tariff barriers and market access issues involving certain agricultural products. Beijing and Washington agreed, in principle, to include relevant agricultural items in the reciprocal tariff reduction framework and to establish indicative targets to expand two-way agricultural trade.
According to the ministry, the US committed to lifting automatic detention measures applied to Chinese dairy products since 2008 and agreed to work to remove similar measures on three categories of Chinese aquatic products. Washington has also approved pilot imports of certain bonsai products from China.
On the Chinese side, Beijing will resume the registration of qualified importers of US beef and restart purchases of poultry products from some US states, the ministry said. China will also speed up the review of suitability materials submitted by some US beef companies, he added.
Regarding rare earths, the ministry stated that the commercial teams of the two countries discussed export control issues extensively and that they will jointly study and address the legitimate concerns of each side. It also reiterated that the Chinese government imposes export controls on strategic minerals such as rare earths in accordance with laws and regulations, and reviews applications for export licenses for civilian use that comply. Source: Dow Jones Newswires.
