China bought $188 million worth of U.S. soybeans on Monday, continuing a string of purchases that began last week, as the world’s two largest economies approach a six-month review of the “phase one” agreement that de-escalated the trade war. The review, set to take place via videoconference on Saturday, will coincide with Trump administration pressure for China to buy more American lobster.
President Trump started the ball rolling on lobster with a memorandum on June 24 directing Agriculture Secretary Sonny Perdue to determine if lobster fishers and producers merit trade war assistance, and directing U.S. trade representative Robert Lighthizer to report monthly on seafood exports to China. “The lobster industry is a crown jewel of America’s seafood industry,” said Trump in the memorandum.
The monthly reports, with the possibility of retaliatory tariffs if purchases fall short of the “phase one” goal of $150 million worth of lobsters, are to begin on Saturday. The USDA was not immediately available to say if aid would be forthcoming for the lobster industry. Perdue was told to consider the issue within 60 days, a period that expires on Aug. 24.
Private exporters reported two sales totaling 588,000 tonnes of U.S. soybeans on Monday for delivery to China during the marketing year that opens on Sept. 1, said the USDA. At current futures prices, the soybeans are worth $188 million. Last week, Chinese importers purchased 772,000 tonnes of U.S.-grown soybeans over a three-day period. By law, exporters are required to promptly report all large sales.
Recent reports of export sales to China have stirred hopes of a price-lifting harvest-time flurry of transactions. U.S. farm exports have declined as a result of the trade war. In the past month, China made two of the largest purchases ever of U.S. export corn — 1.762 million tonnes on July 14 and 1.937 million tonnes on July 30.
Meanwhile, Yi Gang, the head of China’s central bank, said during a Xinhua interview that China would continue to implement “phase one” despite increasingly strained Sino-U.S. relations, reported the South China Morning Post. Xinhua quoted Yi as saying, “No matter how the international situation changes, the most important thing is to get our own things done and to firmly deepen financial reform and opening-up.”
China is obliged under the trade agreement to buy vastly larger amounts of U.S. goods and services, including $36.6 billion worth of U.S. food, agricultural, and seafood products this year. Its purchases of U.S. farm exports are on the rise. Some $8.7 billion worth had been imported by the end of June, according to the Peterson Institute for International Economics, meaning an additional $27 billion will have to be purchased by the end of December to meet the “phase one” goal.
China was a major market for U.S. lobster exports, but seafood faces tariffs as high as 37 percent due to the trade war. Maine accounts for roughly 80 percent of the U.S. catch. Canadian lobsters, which are not part of the trade war, have supplanted U.S. lobsters in China. Beijing has offered exemptions from tariffs for U.S. lobster.