Detail

China (Mainland)

Oilseeds, oils and meals

Soybeans

01/06/2018

Trade

Import policy - trade dispute

Announced – in the context of a broad trade dispute – the introduction, on 6 July 2018, of an additional 25 percent tariff on selected goods imported from the United States, including black and yellow soybeans, reciprocating duties the United States is set to impose, effective the same date, on the importation of certain goods from China.

On 6 July, after several rounds of bilateral trade talks, the United States imposed a 25 percent import tariff on mostly industrial Chinese products worth USD 34 billion, prompting China to levy import taxes on the same value of US products, including several agricultural goods (see also MPPU May’18). Of particular relevance is China’s 25 percent retaliatory tariff on imports of US soybeans, both black and yellow, which brought the total duty charged on such imports to 38 percent (NB: for China, by far the world’s largest soybean buyer, the United States is the second largest provider; on the other hand, about 60 percent of the United States’ soybean exports are directed to China). Besides triggering an abrupt slowdown in China’s soybean purchases from the United States, the measure has affected prices for soybeans and several other commodities in several countries, giving rise to a succession of adjustments in global trade flows. Additional adjustments in overall trade patterns can be expected if the concerned tariff barriers remain in place. The trade tension between the two countries could escalate further, considering that the United States confirmed its intention to start collecting tariffs on an additional USD 16 billion of Chinese imports as of 23 August – a measure China is expected to reciprocate. While grains and oilseeds do not feature in the list of commodities targeted under the second round of tariffs, China’s catalogue includes US fishmeal.