BEIJING/WASHINGTON (Reuters) – The United States on Thursday welcomed China’s promise to buy agricultural goods while maintaining the threat of U.S. tariff hikes as the world’s two largest economies sought to prepare the ground for upcoming in-person talks.
FILE PHOTO: China’s Ministry of Commerce spokesperson Gao Feng attends a news conference at the commerce ministry in Beijing, China, June 19, 2018. REUTERS/Thomas Peter/File Photo
Lower-level U.S. and Chinese officials are expected to meet within days in Washington ahead of talks between top trade negotiators in early October aimed at easing a trade war that has rattled financial markets and fueled fears of a looming global recession.
Global stocks rose on Thursday after both sides made concessions ahead of the talks, with U.S. President Donald Trump delaying an increase in tariffs on Chinese goods by two weeks after China exempted some U.S. drugs and other goods from tariffs on Wednesday.
On Thursday, Beijing said Chinese companies have started to inquire about prices for U.S. agricultural goods purchases. U.S. farmers have been among the hardest hit by the tit-for-tat tariff battle that began more than a year ago and escalated in recent weeks.
“It is expected that China will be buying large amounts of our agricultural products!” Trump said in a Tweet on Thursday.
U.S. Treasury Secretary Steven Mnuchin sought to temper over-optimism, however, telling CNBC that Trump was prepared to keep or even raise tariffs on Chinese imports and that Beijing had asked for more concessions beyond the removal of tariffs.
The Wall Street Journal reported that China was seeking to narrow the scope of negotiations to trade matters by excluding national security issues in order to jumpstart the talks.
On the U.S. side, Trump aides are considering an interim trade deal that would delay or even roll back some tariffs in exchange for commitments on intellectual property and agricultural purchases, Bloomberg News reported.
Speaking at a weekly news briefing in Beijing on Thursday, Chinese Commerce Ministry spokesman Gao Feng said China welcomed the U.S. delay to its schedule tariff hike on billions of dollars worth of Chinese goods.
“According to my understanding, Chinese firms have started to inquire about prices for U.S. agricultural goods,” Gao noted. “(China) hopes both sides would continue to meet each other half way and adopt concrete actions to create favorable conditions for negotiations.”
Possible purchases of U.S. farm goods included pork and soybeans, Gao said, both of which are still subject to hefty Chinese duties.
Despite tariffs of 62% in place since last year, U.S. exports of pork to China jumped 51% in the first seven months of 2019 over last year to 240,000 tonnes, according to the U.S. Meat Export Federation.
In July alone, the United States exported about 3,000 containers, or almost 61,000 tonnes of pork, as buyers stepped up purchases amid a huge shortfall in China due to a massive outbreak of African swine fever that has driven prices to record levels.
China reduced purchases of U.S. farm products in August after Trump vowed to impose new tariffs on around $300 billion of Chinese goods, dimming prospects of a deal.
On Wednesday, the United States agreed to delay increasing tariffs on $250 billion worth of Chinese imports from Oct. 1 to Oct. 15 “as a gesture of goodwill.” The tariffs on those goods were set to increase to 30% from 25%.
Earlier on Wednesday, China announced it was exempting 16 types of U.S. products from tariffs, including some anti-cancer drugs and lubricants, as well as animal feed ingredients whey and fish meal.
Reporting by Stella Qiu, Ben Blanchard, Michael Martina, and Dominique Patton in Beijing and Chris Prentice in Washington; Editing by Muralikumar Anantharaman, Mark Potter and Sonya Hepinstall