The U.S. and China announce list of goods for tax reduction, but soybeans are not yet included

The United States and China announced on Monday (28th) a list of goods on which tariffs may be reduced. (AFP)

[Financial Channel/Comprehensive Report] According to comprehensive foreign media reports, after last week’s Trump-Xi meeting, the United States and China announced on Monday (28th) a list of goods for which tariffs may be reduced, with each side involving approximately US$30 billion in imported goods. Among them, soybeans, the largest agricultural product exported by the United States to China, are not among them and still have to bear an additional 10% tariff.

According to the list released by the White House, the United States may reduce tariffs on 77 categories of Chinese products, including fireworks, Christmas trees, household products, sports equipment, toys and other products.

As for the list of U.S. goods that China plans to reduce tariffs on, it covers 1,619 categories, including meat, seafood, dairy products, grains, coal, wood, and medical equipment. It is worth noting that soybeans, the largest agricultural export from the United States to China, are not among them.

Reuters pointed out that U.S. soybeans still face an additional 10% tariff. Traders warned that even as Chinese state-owned buyers have stepped up purchases, such tariffs are still too high for private Chinese oil mills to absorb the costs. Feng Chucheng, founder and partner of Hutong Research, said, "Although soybeans are a non-sensitive commodity in terms of trade, China's purchase of soybeans is of great political significance and has important political implications."

He added that keeping Soybean on a different negotiating track would allow Beijing to retain negotiating leverage in its dealings with Washington, especially ahead of the U.S. midterm elections.

U.S. Trade Representative Jamieson Greer said in a statement that the list of goods focuses on "non-sensitive goods" from both sides that could benefit from more favorable tariff treatment.

Greer said that this agreement will help ensure that American farmers, manufacturers, businesses and workers have access to the market, and will also benefit American consumers because the United States can import goods including household products and toys from China.

A statement from the Chinese Ministry of Commerce said that both sides will implement tariff reductions simultaneously after completing the procedures required by their respective domestic laws. According to China, about 90% of the goods covered by this reciprocal arrangement will have tariffs reduced to most-favored nation (MFN) rates.

China’s Ministry of Commerce also pointed out that extending the trade truce with the United States by two months to January 10 will provide both sides with space to evaluate their current arrangements for resolving economic and trade issues, while considering how to make progress in these areas.