Chinese Allow Tariff-Free Purchases from the U.S.

The Chinese government permitted several domestic companies to purchase U.S. agricultural products without tariffs. People familiar with the situation tell Bloomberg that the companies will buy U.S. cotton, corn, sorghum, and pork without facing the extra costs of the tariffs. Some textile mills have permission to buy a total of 50,000 tons of U.S. cotton without the 25 percent duty. The total amounts of the corn, sorghum, and pork purchases weren’t available. The move follows the approval for purchasing three million tons of U.S. soybeans last week Bloomberg says there could be a second round of exemptions, depending on how trade talks progress. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are in China this week for the first high-level, face-to-face discussions since the talks broke down in May. In a press conference last week, China’s commerce ministry said companies are willing to buy U.S. farm products, but only in line with domestic demands, and the purchases are their own decisions. A ministry spokesman says there are no direct connections between purchases and the resumption of trade talks.

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