BEIJING—China will remove import tariffs on animal feed ingredients including soybeans, soymeal, and rapeseed from five Asian countries, the Ministry of Finance said on June 26, a sign that Beijing is seeking alternative supplies of the commodities as a trade dispute escalates with the United States.
China will drop tariffs on soybeans, soymeal, soybean cake, rapeseed, and fishmeal originating from Bangladesh, India, Laos, South Korea, and Sri Lanka beginning on July 1, the ministry said.
Tariffs on soybeans are currently at 3 percent, rapeseed at 9 percent, soybean meal and cake at 5 percent, and fishmeal at 2 percent.
Even though the authorities had planned the tariff cuts since March, the cuts indicate that China is taking steps to reduce its dependence on U.S. soybeans amid mounting trade disputes between the two countries. Soybeans are China’s biggest agricultural import from the United States by value.
Apart from India, the countries included are relatively small soybean producers. None of them exported any of the oilseed to China in 2017.
India grew 11 million tons of beans in the 2016–17 marketing year, but only exported 269,000 tons, according to data from the U.S. Department of Agriculture.
However, the country exported just over 2 million tons of soymeal globally.
India produced 7 million tons of rapeseed that year, too, but did not export any of the crop.
China agreed to drop the tariffs on more than 2,000 items as part of the Asia-Pacific Trade Agreement signed in Thailand in January 2017. The finance ministry announced the tariff cuts in March.
Still, the move occurs less than two weeks after Beijing said it would impose additional 25 percent tariffs on 659 U.S. goods worth $50 billion, including soybeans, as a prolonged trade spat between the world’s top two economies grows.
The penalties were in retaliation for Washington’s decision to levy tariffs on $50 billion worth of Chinese goods. When the soybean tariffs were first proposed, the news drove up soybean prices from other suppliers such as Brazil.
The United States is the world’s second-largest exporter of soybeans, after Brazil. China’s reliance on foreign soybeans could mean it will be forced to buy soybeans at higher prices, which would trickle down to consumers’ wallets.
By Josephine Mason and Dominique Patton. Epoch Times staff member Annie Wu contributed to this report.