U.S. and China agree to reduce tariffs

The 90-day pause is welcomed, the American Soybean Association says

METADATA –

The United States and China have agreed to a three-month tariff reduction.

A joint statement from the two countries on May 12 indicates the U.S. will reduce tariffs on China to a minimum of 30 percent. And China agreed to reduce its tariffs on U.S. products to 10 percent and to remove non-trade barriers and restrictions.

Each country was charging the other tariffs of 145 and 125 percent, respectively.

This truce will last for about 90 days while the two sides continue to negotiate.

The soybean industry is pleased with this development.

The tariff reduction is welcomed, but more needs to be down to ensure American soybeans are competitive on the global market, said Caleb Ragland, president of the American Soybean Association.

“This is a big development and one we are very pleased to hear, yet the tariff that remains in place for U.S. soy is far from inconsequential: Products purchased from our competitors in Brazil and Argentina are not burdened with this extra cost,” he said in a statement.

That means China will turn to South America first for its purchases and only buy U.S. soybeans when it absolutely must,” Ragland said. “Also important to note, the 90-day pause will end in August—right before our harvest season. We need the administration to continue its negotiations with China to find a long-term, sustainable solution that removes retaliatory tariffs and protects market access for our agricultural products.”

Soybean markets reached positively to the temporary truce.

Prices reached as high as $10.60 per bushel, marking the highest point since Feb. 6.