China can satisfy two objectives — filling a huge gap in its meat supply and complying with the "phase one" trade agreement with the United States — by buying American-grown pork, say two Iowa State University economists.
The “phase one” trade agreement with China assures sales of “up to $50 billion in agriculture alone,” said President Trump at a White House signing ceremony on Wednesday, although Chinese Vice Premier Liu He said sales would depend on domestic demand and U.S. prices. A senior administration official said later that the pact did not require China to remove retaliatory tariffs on U.S. farm goods — a potential barrier to exports.
Three weeks after he slammed Brazil and Argentina for actions "not good for our farmers," President Trump reversed his decision to impose high tariffs on steel and aluminum imported from the South American nations, said Brazilian President Jair Bolsonaro on social media over the weekend. "The relationship between the United States and Brazil has never been Stronger!" tweeted Trump on the same day.
Although President Trump declared "a very large Phase One Deal with China," the White House put few agricultural details in writing over the weekend, saying the agreement calls for "substantial purchases" of farm exports, rather the quadrupling trumpeted by U.S. trade representative Robert Lighthizer. Analysts such as Joe Glauber of IFPRI were dubious that U.S. exports, forecast at $11 billion this year, could leap overnight to the $40-billion-a-year level cited by the administration.
In what may be an opening in the Sino-U.S. trade war, a group of Chinese officials will tour U.S. farms next week, said Agriculture Secretary Sonny Perdue on Thursday.
Hours after complimenting China for waiving tariffs on some U.S. products, President Trump announced on Wednesday a two-week delay, until Oct. 15, of higher tariffs on $250 billion worth of Chinese-made goods. On social media, Trump called the delay “a gesture of good will.”
U.S. farm exports plunged by an abrupt 6 percent this year due to the Sino-U.S. trade war and a worldwide slowdown in economic growth, but they will rebound mildly in the year ahead, said the USDA on Thursday. However, the agency’s first forecast of exports in fiscal 2020 excluded the impact of a promised mutual escalation this fall of the trade war between China and the United States.
Exporters reported the sale of 10,200 tonnes of U.S. pork to China during the week ending Aug. 8, the same period that China said it was shutting off purchases of American ag exports.
U.S. farmers will harvest their smallest corn and soybean crops since 2013, but the trade war will constrain exports of America’s two major crops for the second year in a row, forecast the USDA on Monday. Soybeans would sell at the lowest average price at the farm gate in 13 years.
China will remain the world’s largest soybean importer in coming years even if the trade war with the United States is not settled, but it won’t be buying as much of the oilseed, said USDA analysts on Wednesday.