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U.S. cancels planned tariffs on China

UPDATED: Fri., Dec. 13, 2019

A security guard looks at his phone near a American lingerie company Victoria's Secrets store in Beijing on Friday, Dec. 13, 2019. The U.S. and China have reached trade deal that will reduce punitive tariffs on each other's goods. (Ng Han Guan / AP)
A security guard looks at his phone near a American lingerie company Victoria's Secrets store in Beijing on Friday, Dec. 13, 2019. The U.S. and China have reached trade deal that will reduce punitive tariffs on each other's goods. (Ng Han Guan / AP)

President Donald Trump announced Friday the United States won’t impose $160 billion of planned tariffs on Chinese goods. Local experts say they are encouraged, but it’s too early to say if Washington farmers will see relief from the temporary agreement.

Mark Powers, president of the Northwest Horticulture Council, said it’s difficult to predict if the reduction in tariffs would benefit Washington’s fruit growers until China announces specific changes on specific products and an official agreement is signed. Overall, he said the announcement seemed promising.

“It’s certainly better to have a de-escalation in this (trade) war than an escalation,” he said. “In general, that should be positive for most people in the trade world that are involved in shipping product to China.”

In addition to canceling the $160 billion in tariffs scheduled for Sunday, the United States will also reduce existing import taxes on about $112 billion in Chinese goods from 15% to 7.5%. Trump told reporters Friday that Chinese farm purchases would reach $50 billion; Chinese officials have not confirmed that number. China’s retaliatory tariffs over the past year and a half have cost U.S. farmers and businesses billions of dollars.

Chinese officials said at a briefing in Beijing that if the U.S. reduces its tariffs, they would lower trade penalties and cancel new tariffs that also would have taken effect Sunday.

China is one of the United States’ biggest apple markets, and Washington’s apples make up 95% of all apples exported there. Powers said tree fruit sales, which currently carry a 60% tariff, have been down generally, with a 41% reduction in cherry sales to China and a 24% reduction in apple sales in China. He said no pears are currently being sold to China.

Powers anticipates the impacts will grow if the new agreement does not include a reduction in fruit tariffs in 2020.

Michelle Henning, executive director for Washington Association of Wheat Growers, said Japan is Washington’s biggest wheat buyer, but China had been an emerging market before the tariffs.

“Once those tariffs came down, they stopped buying from us,” she said.

Henning said Friday’s agreement is likely the first step forward to a trade agreement that could allow Washington to export to China again, but there is still far more work to do before that happens.

Glen Squires, CEO of the Washington Wheat Commission, said the Pacific Northwest exports 90% of the wheat it produces, so any movement on a trade deal could benefit Washington farmers.

He said China does not produce high-protein wheat, and soft white wheat from the Pacific Northwest was in high demand in China before the the tariffs. He said China has recently been buying wheat from Canada instead, but hopes this deal will lead to an unrestricted market open to American agriculture.

“It’s obviously not a done deal, but the fact of the matter is it’s moving, and that’s encouraging,” he said.

Since July 2018, the Trump administration has imposed trade sanctions on China that have led to widespread criticism, sometimes changing or delaying planned tariff rates. Repeated rounds of negotiations also failed to achieve a deal. The uncertainty over Trump’s trade policies has curtailed U.S. business investment and likely held back economic growth. Many corporations have slowed or suspended investment plans until they know when, how or even whether the trade standoff will end.

Though some tariffs have been reduced, the U.S. will still levy 25% import taxes on $250 billion in Chinese goods. The additional $160 billion that was dropped Friday would have extended the tariffs to almost everything China sells to the United States.

The Associated Press contributed to this report.

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