U.S. and Chinese negotiators may be within four weeks of resolving the Sino-U.S. trade war, said President Trump on Thursday with Chinese Vice Premier Liu He seated next to him. Trump said the nations are working on a comprehensive agreement. “And whether it’s our farmers or our technology people, all of them will be really happy.”
“The deal is coming along really well. We’ll probably know over the next four weeks,” said Trump. “I really feel that over the next fairly short period of time, we’re going to know.” Liu, who spoke briefly during the session with reporters, said, “We have made great progress.” Trump declined to say when he would meet with Chinese President Xi Jinping to wrap up negotiations. “If we have a deal, there will be a summit.”
U.S. trade representative Robert Lighthizer said there are “some major, major issues” outstanding. Trump wants an agreement that reduces the U.S. trade deficit with China and that fundamentally changes Chinese trade practices and reduces intellectual piracy. China has reportedly offered to buy billions of dollars worth of U.S. goods, including farm products, to narrow the trade gap. Some agricultural analysts are skeptical that there would be a net increase in exports from such purchases or whether they would divert commodities that would have simply gone elsewhere.
Trump shifted from threatening to close the U.S.-Mexico border to suggesting a 25-percent tariff on Mexican-made automobiles entering the United States. At one point on Thursday, he issued a warning to Mexico about controlling migrants and the drug trade within one year, but in the Oval Office, he said, “We would start with the tariffs and see what happens.”
Zippy Duvall, president of the American Farm Bureau Federation, the largest U.S. farm group, expressed relief that a border closure was not imminent. “This is good news for farmers and ranchers on two fronts: trade and access to agricultural workers. … When it comes to trade, Mexico is an essential partner, and we will continue to push for congressional approval of the USMCA trade agreement.”
Mexico and Canada are neck-and-neck competitors for the distinction of being the largest U.S. food and agricultural trade partner. Together they generate $1 of every $3 in U.S. exports and imports of food and ag products.
Before the trade war, China was the No. 1 customer for U.S. farm exports, buying about $21 billion worth of them a year. This year, China would tumble to fifth place with purchases of some $9 billion, according to USDA estimates. Soybeans are the primary agricultural victim of Chinese retaliatory tariffs, with sorghum suffering as well. Stockpiles of both crops are swelling, and U.S. farmers plan to curtail plantings of them this spring.
During his meeting with Liu, Trump asked cabinet members about the state of negotiations with China. “How’s the agricultural business coming along?” he asked Agriculture Secretary Sonny Perdue. “Looking forward to an agreement, Mr. President,” replied Perdue.