At the White House, Chinese Official Says His Country Will Buy More U.S. Soybeans
In a letter read aloud at the White House, Chinese President Xi Jinping said Beijing will buy more U.S. farm exports, a decision that President Trump hailed on Thursday as a sign of good faith in ongoing negotiations to end the trade war between the nations. Trump said a deal “will be made, if it’s made, between myself and President Xi” before his March 1 trigger for higher U.S. tariffs on Chinese goods.
“That’s going to make our farmers very happy,” said Trump during a meeting with Chinese Vice Premier Liu He, who led a Chinese delegation in two days of talks with U.S. trade officials. Trump said negotiators had made “tremendous progress.” In his letter, Xi said he hoped for a speedy and mutually satisfying agreement. One of the White House’s objectives is increased Chinese purchases of U.S. manufactured goods, services, and agricultural products, to reduce China’s trade surplus.
“Mr. President, in our last phone call, you said you wanted for China to buy more agricultural products. I have made some arrangements about which, I believe, you might have been briefed,” wrote Xi. Liu said China would buy 5 million tonnes of soybeans, which would nearly double its soybean purchases so far this marketing year.
“Wow,” responded Trump. Liu added “per day,” according to a White House transcript, though an administration official told Reuters that a single purchase of 5 million tonnes was intended. The USDA expects a record U.S. soybean stockpile of 955 million bushels, equal to 26 million tonnes, at the end of this marketing year on Aug. 30. The 2018 soybean crop was a largest ever: 4.6 billion bushels, or 125 million tonnes.
“What is a skeptic to make of all this?” tweeted economist Scott Irwin of the University of Illinois in response to the reports of 5 million tonnes a day. “Maybe 5 mmt [million metric tons] per day for a week!”
Before the two countries imposed tit-for-tat tariffs, China was the No. 1 customer for U.S. farm exports and bought 1 in every 3 bushels of soybeans grown in the United States. Since harvest of the 2018 soybean crop, exports to China are running at one-seventh the pace of the previous marketing year. Alternative markets have been slow to develop.
Trump said the prospect of Chinese purchases — “our soybeans and other product” — was good news for American farmers. “Absolutely,” agreed Agriculture Secretary Sonny Perdue. “Good news.” Two U.S. soybean groups were not immediately available for comment.
Earlier in the day, the USDA announced the award of $200 million to 57 groups to identify new markets for U.S. ag exports. The $200 million is part of a multibillion-dollar administration package to mitigate the impact of unfair Chinese tariffs on U.S. agriculture. The package includes up to $9.6 billion in cash payments to farmers and $1.2 billion in purchases of surplus food for donation to public nutrition programs.