No Decision From President Biden on Lifting China Tariffs...Yet
China Tariffs 071122
President Biden says he has not made a decision yet on whether to lift some of the $370 billion of tariffs imposed on Chinese imports by the Trump Administration. Biden has been talking about rolling those duties back for weeks as a way to curb inflation while opening a new exclusion process for firms to win additional relief. However, there are mixed opinions on whether or not the cuts will take place, whether China will reciprocate, and what the impact will be on agriculture.
Farm Journal Analyst Jim Wiesemeyer tells us he is not optimistic about tariff relief materializing. And if it does, he says it won't have much direct effect on ag imports into China.
"On the initial ones, I don’t see much because U.S. Trade Representative Katherine Tai wants some leverage," he says. "Although China has clearly shown that it is not going to move them. So initially I don’t see it will be part of the $10 billion.”
One caveat is some targeted duties could be dropped which would lower farmers' costs such as the 25% tax on semiconductors and other parts that go into farm machinery. Plus, crop protection product ingredients.
Frayne Olson, NDSU crop marketing economist says, “Some of the basic chemistry we import from China, we add in the specialized ingredients here and they’re sold in the U.S. So, this reduction or potential elimination of import tariffs may have an impact on the input side, the cost of inputs coming in.”
And while tariffs on soybeans imported from China were already under some import exclusions, officials with the American Soybean Association say any further movement on the 301 and 232 tariffs will be helpful.
Steve Censky, American Soybean Association CEO says, “Even though the tariff China has right now for a lot of these state-owned enterprises has been suspended on soy imports, they're still hanging out there and it has a bit of a chilling effect.” So, Censky is optimistic about the impact at least a partial reduction of levies will have on the ag industry.
Wiesemeyer says the tariff reduction isn't likely to lower inflation and is an admission that tariffs don't work. Additionally, the White House has also been weighing a new investigation into Chinese subsidies and their damage to the American economy as a way to pressure Beijing on trade.
