India set to raise tariffs on some US goods

US goods and services trade with India stood at an estimated $142.1 billion in 2018. (File/AFP)
Updated 15 June 2019

India set to raise tariffs on some US goods

  • The government had said last June it would raise import taxes on a slew of US goods including almonds and apples
  • It delayed raising tariffs several times as trade talks between the world’s two biggest democracies raised hopes of a resolution

NEW DELHI: India has decided to raise tariffs on imports of 29 goods from the US after having deferred the move several times since announcing it last year, media reported Saturday.
The government had said last June it would raise import taxes on a slew of US goods including almonds and apples, apparently irked by Washington’s refusal to exempt New Delhi from higher steel and aluminum tariffs.
But it delayed raising tariffs several times as trade talks between the world’s two biggest democracies raised hopes of a resolution.
However President Donald Trump’s decision to strip New Delhi of its preferential trade status earlier this month appears to have triggered the latest Indian move.
There would be no further delays in imposing the retaliatory tariffs, the Economic Times reported, quoting a government official, with the new taxes due to take effect from Sunday.
The Press Trust of India news agency said the finance ministry would make a formal announcement soon, although it had already conveyed its decision to the United States.
The trade tensions come despite Washington’s effort to boost ties with India as a counterweight to China and Trump’s stated good relations with Prime Minister Narendra Modi.
Trump and Modi are set to meet at the G20 summit on June 28-29 in Osaka where the sticky trade issue is likely to be taken up.
It is also likely to figure during talks with US Secretary of State Mike Pompeo who is set to visit India for talks later this month.
On Wednesday Pompeo had said the US was open to dialogue with India and would “broach some tough topics.”
US goods and services trade with India stood at an estimated $142.1 billion in 2018. The US trade deficit with India was $24.2 billion, according to official data.
Washington is already engaged in a full-blown trade war with India’s regional rival China.


Despite agreement, China purchase of US agriculture lags

Updated 10 August 2020

Despite agreement, China purchase of US agriculture lags

  • The two sides are set to meet on Saturday to discuss the deal, American media says

NEW YORK: Seven months after the United States and China signed a preliminary agreement to temper their trade war, Beijing’s purchases of US agricultural goods have yet to reach the deal’s target.

As President Donald Trump readies for a tough reelection battle in November, US media reported the two sides are set to meet beginning August 15 to discuss the deal, which calls for China to sharply increase buying American goods and services this year and next.

But according to data compiled by the Peterson Institute for International Economics (PIIE), Chinese agricultural purchases at the end of June were far from where they should be at this point in the year.

They had reached only 39 percent of their semiannual target, according to US figures, or 48 percent, based on Chinese figures.

“If we get back to what the level of trade was in 2017, we’ll be lucky,” said Chad Bown, a PIIE senior fellow who authored the study, referring to the year before the trade war began.

Under the deal’s terms, China agreed to increase agricultural imports $32 billion over the next 2 years from 2017 levels.

Chinese orders for corn and soybeans have increased since mid-July, with Beijing buying just over 3 million tons of American oilseeds between July 14 and Aug. 7, according to US Department of Agriculture data.

At the end of July, the United States reported the largest-ever daily order by China for its corn, of 1.9 million tons.

The announcements were a relief to US farmers, who are expecting a bumper crop this year and need to find buyers to take it.

They also came at a time of high political tension between the two countries, after the Trump administration authorized sanctions against several Hong Kong leaders over the rights crackdown in the city, and restrictions on Chinese apps WeChat and TikTok.

The Chinese “realize we’re not being the best of buddies right now, but they need the products and they’re gonna take as much as they need,” said Jack Scoville, agricultural market analyst for Price Futures Group.

It’s possible that Beijing will change its orders from buying this year’s harvest to next year’s.

But analysts warn that any orders could be called off before the ships carrying them leave port.

Brazil and Argentina, two of the world’s largest soybean and corn producers, are starting their harvests next spring, said Brian Hoops, president of the brokerage firm Midwest Market Solutions.

China “could cancel all these purchases they made in July and buy at much cheaper prices if that’s available to them,” Hoops said.

The trade deal dubbed “phase one” and signed in January has managed to survive both the tensions and the sharp global economic downturn caused by the coronavirus pandemic, which has badly hit international trade.

US Trade Representative Robert Lighthizer in June said China would follow through on its commitments, while Washington would also pursue a “phase two” trade deal that “will focus on issues of overcapacity, subsidization, disciplines on China’s state-owned enterprises, and cyber theft.”

Bown said any success in getting China to buy not just farm but also energy and manufactured goods, would aid Trump in his reelection campaign.