Positive news and signs of a calming trade war continue to come from both the US and Chinese governments as 2018 comes to a close. A very welcome undertone after an extremely chaotic second half of 2018 with concerns for increasing tariffs and the potential for unknown results.
This month, several new developments have come to the forefront.
On December 14th, China agreed to the purchase of 1.13 million metric tons of Soybeans; the first purchase since the trade war began in July. While this is not up to the full purchase standard of approximately 30-35 million metric tons, it is a big step in the right direction.
Last night, December 27th, the US made perhaps the most significant comment since the trade war began. The US has granted exclusions to 984 HTS classifications imposed on China from the section 301 Tariffs on $34 Billion in imports. This grouping largely targeted intellectual property and tariffs were imposed at 25% from July 6th. The exclusions from tariffs is slated to be retroactive. A full publication of the list is expected today from the U.S. Trade Representative Office here https://ustr.gov.
Beginning January 1, China has confirmed to reduce US car import tariffs from 40% to 15%.
Finally, the U.S. is schedule to send a trade delegation to Beijing the week of January 7th. This will be the first face to face since Trump and Xi met at the G20 summit. The delegation will be led by Deputy U.S. Trade Representative Jeffrey Gerrish.
While these items do not guarantee a definitive conclusion to the trade war, overall they are a signal of positive steps toward a resolution and a more stable trade relationship with China.