China has recently exempted some agricultural products from the U.S. from part of its tariff. Some examples of these imports are soybeans and pork. This news came after U.S. President Donald Trump announced that he would hold off on the taxes for Chinese imports worth more than $500 billion. He pushed it back by two weeks as China will be celebrating its National Day on the original dates.
Many private Chinese companies purchased more than ten boatloads of soybeans from America last week. This procurement is the largest one since June, with over 600,000 tons. China has decided to exempt this delivery from tariffs.
These two countries are in the midst of negotiations, trying to make out a deal that will benefit both sides. As China and the U.S. are the two largest economies in the world, this trade war has affected several companies from various countries. People around the globe are hoping that both parties will be able to agree on new trading terms. If the trade war continues, the overall global economy will continue to suffer.
It’s been more than a year since the U.S. initiated the trade war against China, stating that the latter had unfair trading practices. The U.S. administration’s reasons for starting the war were to protect American businesses from outside competitors and deal with several national security concerns. They also suspected China of theft of intellectual property.
Both American and Chinese firms have suffered dramatically throughout the year. In China, manufacturers are having difficulty after having lost their largest export market. Most of the products they make used to be sent overseas to America. On the other hand, consumers in America have to deal with higher tariffs.
Specifically, American agricultural firms are suffering from low sales as China has banned them from sending products to their country. These companies ended up having to lay some people off due to the increased costs. They cannot operate the same way before the trade war because their expenses exceed their profit.
Though this is a moment of cooling down of the trade war, it does not ensure the end of the conflict. Due to the rift between the two countries, America has lost more or less 300,000 jobs. If it escalates any further, analysts can expect the number to rise to approximately 800,000. This situation could lead to a recession in the nation’s economy. Thus far, economists note that the trade war has cost the United States of America more or less 0.3% in GDP.