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China tariff cut offers little relief

It sounded like good news for U.S. fruit exporters when China announced it would cut tariffs as part of its trade agreement with the U.S.

But one trade expert says it’s not a large cut considering the huge tariffs that were applied in the last two years.

Officially, China said last week that beginning on Friday, February 14, it will cut tariffs on some American products from 10 percent to 5 percent, and some others from 5 percent to 2.5 percent.

Richard Owen, vice president, global membership & engagement for the Produce Marketing Association, BB #:153708, said many produce items, such as apples, table grapes, citrus, plums, cherries and pears had the 10 percent tariff added last year, and those tariffs will be reduced from 10 percent to 5 percent.

“However, there were another two rounds of added tariff in 2018, so in general the tariff for U.S. fruits is still very high,” he said. “For the rounds of tariff additions in 2018 and 2019, a total of 50 percent was added for U.S. fruits. Only 5 percent will be reduced on February 14, which is small compared with the total tariff added, but still some progress.”

Last month, the two nations agreed to a first phase of a trade deal in which China agreed to buy $200 billion worth of U.S. exports in the first two years of this first phase of the deal. Agriculture expects to make up $20 billion in each of the two years.

Although Chinese officials didn’t say how they planned to account for that amount, some analysts speculated it could come in tariff reductions to allow the market to determine which imports into China would get a bump.

Greg Johnson is Director of Media Development for Blue Book Services