U.S. and Chinese officials opened their second consecutive week of negotiations to resolve the countries’ trade war on Tuesday with President Trump saying the “very complex talks…are going very well.” Trump told reporters at the White House, “We’re asking for everything that anybody has ever even suggested. These are not just, you know, ‘let’s sell corn or let’s do this.’ It’s going to be selling corn, but a lot of it, a lot more than anyone thought possible.”
Trump has threatened to increase sharply U.S. tariffs on $200 billion of Chinese goods on March 1 unless the nations agree on new trade rules. The United States is pressing for so-called structural changes in Chinese trade policies as well as larger purchases by Beijing of U.S. goods and services as a way to reduce China’s trade surplus. March 1 “is not a magical date, a lot of things can happen,” said Trump during impromptu comments in the Oval Office.
Deputy Agriculture Secretary Steve Censky told a grain-trade conference that the administration sought “fundamental” reforms in the agriculture sector in China, such as removal of barriers to imports of U.S. corn, wheat and rice and “a functioning biotech approval process,” reported Bloomberg on Monday. Censky, who was part of trade talks last week in Beijing, said the pace of negotiations was accelerating as March 1 nears but, “I don’t think we will solve everything this week either.”
Ohio Sen. Rob Portman said on CNBC’s “Squawk Box” program that he was optimistic the two nations would reach a partial trade agreement, as a minimum, before March 1, which would allow negotiations to continue without an increase in U.S. tariffs. Politico quoted Portman, a Republican, as saying, “I hope we get at some of those structural issues and create some way to have consequences if China doesn’t follow through.” The senator said he expected action on three areas by China—larger purchases of U.S. products, new protections for U.S. intellectual property, and fewer subsidies for Chinese state-owned enterprises.
Before the trade war, China was the top customer for U.S. farm exports and bought one of every three bushels of the U.S. soybean crop. It is forecast to rank fifth among importers this year, with purchases running at 40 percent of its previous average.
China is a comparatively small market for U.S. corn at present, partly due to domestic supports that resulted in a mammoth inventory, equal to a nine-month supply. The United States says China employed trade barriers to discourage imports while it whittles down its stockpile. During the trade year that ended last August 31, China imported 12 times more U.S. sorghum than corn, according to USDA data.