China has halted imports of US agricultural products following US President Donald Trump’s unexpected order last week to impose additional duties on new Chinese products.
Beijing decision-makers were unexpectedly surprised by the US president’s announcement on Thursday that he is unhappy with the development of US-China trade talks, and is charging a 10 percent surcharge on $ 300 billion a year in Chinese imports from September 1. This is the remainder of the Chinese products destined for the United States which have not yet been subject to the additional duty. The Chinese government has promised decisive responses.
The Bloomberg News Agency, citing well-informed Chinese sources, said on Monday that the Chinese government had called on state-owned companies to suspend US agricultural purchases. This is what happened, companies are waiting and the next step depends on how the negotiations develop.
The privately held companies also stopped purchasing US soybeans due to uncertainties in US-China trade relations, although they did not receive any information from the government about any changes.
Chinese companies have turned to South America and are trying to make up for lost US imports.
Darin Friedrichs, an analyst for Asian commodities markets at INTL FCStone’s New York-based financial services firm, told China Bloomberg TV that China is one of the largest agricultural trading partners in the United States. If it stops imports, it will be felt by US farmers and President Trump voters in the country. The obvious way of retaliation is for the Chinese to retaliate before next year’s presidential election.
The Chinese Ministry of Commerce did not answer questions about stopping US agricultural imports.
Chinese President Xi’ing Qing Ping promised US President Donald Trump at his personal meeting in Osaka at the end of June – again a “ceasefire” during bilateral talks, broken by President Trump’s imposition of a new surcharge – that China will take more to buy agricultural products from the United States. However, President Trump has since complained that the Chinese side has failed to keep this promise.
China was the United States’ third largest export market last year. Exports totaled $ 120.3 billion, down 7.4 percent from the previous year. Within that, agricultural products were worth $ 9.3 billion, making China the fourth largest market for American agricultural goods. The highest value, at $ 3.1 billion, was imported from China to the United States.