China to grant regular tariff waivers for US farm imports

Bloomberg

China will provide retaliatory tariff waivers to buyers of US farm products on a more regular basis after the countries reached a phase one trade deal, according to people familiar with the situation.
Waivers had previously been given in tranches but they’ll now be handed out more frequently, said the people, who asked not to be identified as the matter is private. The move will make it less punitive for Chinese companies to purchase US goods that are still subject to retaliatory trade tariffs and thereby help Beijing meet any commitments it has made as part of a trade deal.
While Beijing has an interest in keeping its side of any pact to hasten the end of its trade war with the world’s biggest economy, China also needs to import agricultural products from overseas in order to feed its 1.4 billion people. This has become particularly critical in the past year as African swine fever destroyed swathes of the country’s pig population.
US trade representative Robert Lighthizer has said Beijing made detailed pledges on agriculture that would see it purchase at least an additional $16 billion annually in commodities on top of the pre-trade war level of $24 billion and endeavour to buy as much as $50 billion annually. But detailed targets on each commodity won’t be made public, he said.
China’s ministry of finance said that the country will maintain its retaliatory tariffs on American soybeans and other farm products after the trade deal, but continue to process waivers. The world’s largest soybean importer has been issuing tariff exemptions in tranches to buy the oilseed it needs to produce cooking oil and animal feed.
The finance ministry didn’t immediately respond to a fax on Tuesday, seeking comment on the move to more regular tariff waivers.
Lighthizer said he expects the 86-page trade agreement to be signed by him and his counterpart, vice premier Liu He, in early January in Washington and released publicly then. Lawyers for both sides will review the accord before signature, and Lighthizer sees it coming into effect 30 days after signing.
In efforts to ease fears of other countries that supply farm commodities to China, Ning Jizhe, vice chairman of the National Development and Reform Commission, has stressed increased agricultural purchases would comply with World Trade Organisation rules. “Expanding China-US trade will not affect interests of other trading partners,” he said. Brazil’s shipments of soybeans to China have surged since the trade war started.

China may buy ethanol, divert Hong Kong trade to hit pledge
Bloomberg

Further details are emerging on how China would increase imports from the US by as much as $200 billion over the next two years in order to meet its commitments under the phase one trade deal signed last week.
That accord, yet to be officially signed, includes reaching purchases of $40 billion to $50 billion per year in agricultural commodities, a level some analysts have doubted is feasible. To help attain that figure, Beijing plans to restart purchases of ethanol by lifting or waiving trade war tariffs on the fuel, said people familiar with the matter.
In addition, China is considering re-routing trade that currently passes through Hong Kong to mainland ports, the people said. That could enable around $10 billion a year in goods transshipped there from the US to be directly booked in the mainland, boosting the tally.
The US does not count shipments that go through Hong Kong as part of its trade with China.