China said Friday that it will, at least temporarily, lift tariffs on U.S. pork and soybeans.
What's the background?
When President Donald Trump announced global tariffs on steel and aluminum in March 2018, it triggered a trade war with China. Since then, with the exception of a brief respite in December 2018, both countries have engaged in an escalating battle of tariffs and retaliatory tariffs.
In May, China stopped all purchases of U.S. soybeans. In 2017, China bought $12.25 billion worth of soybeans. In 2018, that number fell to $3.1 billion.
“China is eating the Tariffs.” Billions pouring into USA. Targeted Patriot Farmers getting massive Dollars from the… https://t.co/2vDquqQM2C— Donald J. Trump (@Donald J. Trump)1567782860.0
On Sept. 6, Trump tweeted that China was "eating the tariffs" and that "billions" were "pouring into the U.S." He also said, "Targeted Patriot Farmers getting massive Dollars from the incoming Tariffs!"
However, Trump's own economic adviser, Larry Kudlow, admitted in May that it was actually U.S. importers and companies who paid for the tariffs. He suggested that China would pay in the long term, however, with "GDP losses and so forth."
Rather than getting "massive dollars" from these tariffs, American farmers have been hit by the consequences of a diminishing market and an increase in the cost of farming equipment due to the steel and aluminum tariffs. So far the federal government has given farmers nearly $30 billion in bailouts to offset the effects of the tariffs.
What happened now?
On Friday, the Chinese news agency Xinhua announced that China would be lifting its steep tariffs on imports of soybeans and pork from the United States.
"We hope that the United States is as good as its words and will fulfill its promises, in order to create favorable conditions for cooperation in the agricultural field," Xinhua said in a statement.
But even with the tariffs being lifted, the amount that Chinese importers may purchase from the United States may be reduced. China has started buying soybeans from alternative countries like Argentina and Brazil.