Business

Amid trade war detente, China considers buying some U.S. farm products as show of goodwill

Bloomberg

China is considering buying some U.S. agricultural products as a gesture of goodwill amid the resumption of trade talks between Beijing and Washington, though the volume is likely to be smaller than before, according to people familiar with the situation.

Purchases could include soybeans, corn and pork, according to the people, who asked not to be identified as they were not authorized to speak to the media.

Total volumes will depend on the progress of trade talks, though it will probably be smaller than the amount China committed to buy during the previous truce, they said.

U.S. President Donald Trump struck a truce with Chinese President Xi Jinping at the weekend, on the sidelines of the Group of 20 summit in Osaka, Japan.

But the plan hasn’t been discussed with their American counterparts, the people said, and isn’t a part of the current truce agreement. While the potential purchases may provide some comfort to America’s farmers, the overall cautious tone suggests China is unwilling to promise too much without a deal.

During the last detente, in December, China committed to buying over 20 million tons of U.S. soy, pork and corn. After talks fell apart in May, China said it would continue with the purchases, though it did ask for some shipments to be delayed.

Some Chinese buyers were asking for offers of U.S. soybeans to be shipped out of the Pacific Northwest, said Dan Basse, president of Chicago-based consultant AgResource Co. “No sales that I have heard,” he said in an email.

An influential Chinese agricultural researcher said this week that Beijing is unlikely to start purchasing large amounts of U.S. products anytime soon.

Barriers include tit-for-tat tariffs that remain in place, as well as tensions over Huawei Technologies Co., said Li Qiang, chairman and chief analyst at Shanghai JC Intelligence Co. Buying more U.S. agricultural goods is also unlikely to change Washington’s strict demands for concessions from China on intellectual property.

“I’m not sure there’s any point for China to buy more than is needed,” wrote Darin Friedrichs, senior Asia commodity analyst at INTL FCStone, in an emailed report.

Trump said after the G20 meeting that he would hold off indefinitely on tariffs planned for an additional $300 billion in Chinese imports, while allowing U.S. companies to continue to do some business with Huawei — one of the country’s most prominent firms.

Still, the White House has yet to reveal details of Trump’s arrangement with Xi, leaving uncertainty about how the two countries will proceed.