(Bloomberg) -- China is in the process of waiving retaliatory tariffs on imports of U.S. pork and soy by domestic companies, a procedural step that may also signal a broader trade agreement with the U.S. is drawing closer.
China’s finance ministry said it has started to process the applications after the firms purchased a certain amount of U.S. goods based on its needs. The ministry is working to waive the tariffs resulting from the trade war on those goods, it said in a statement on Friday.
American and Chinese negotiators have signaled that they may be drawing closer to agreeing on phase one of a broader accord that would resolve the trade dispute. However, President Donald Trump has said that he wouldn’t mind if it takes until after the 2020 U.S. election, and that a threatened Dec. 15 tariff increase will proceed if the talks fail to yield a deal he likes.
China began issuing waivers on American soybeans, cotton, corn, sorghum and pork as the Asian nation sought to press forward on a trade deal.
While the waivers allow buyers to import U.S. soybeans without paying the 30% retaliatory tariffs, some traders had difficulty clearing customs as they were required to pay a deposit in lieu of the levy before they could apply to the finance ministry for an exemption.
Many had been struggling to stump up the cash, according to people familiar with the matter last month. However, China’s customs authorities began letting importers use a letter of guarantee from banks instead of cash to pay the deposit, allowing the beans to flow again, according to the people.
Still, unless new quotas for waivers are issued, U.S. exporters may not see a huge inflow into China. Buyers have used up almost all of its waivers to purchase American soybeans, people familiar with the matter told Bloomberg earlier this week.
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