China says it will buy $20 billion of US farm products in year one of a partial trade deal

  • China is willing to buy as much as $20 billion of US farm goods in the first year if a phase-one trade deal is signed with the US, Bloomberg reported.
  • That would bring imports of US agriculture goods in line with pre-trade-war levels. China would also potentially increase purchases to $40 billion to $50 billion if a potential deal goes into a second year and tariffs are removed.
  • To lay the groundwork, China has ramped up soybean purchases and issued waivers for grain.
  • Read more on Business Insider.

If a phase-one trade deal is signed with the US, China will aim to buy at least $20 billion of US agricultural products in the first year, and would consider boosting those purchases down the line, Bloomberg News reported, citing people familiar with the matter.

Purchases totaling $20 billion in the first year would bring imports of US farm goods in line with 2017 levels, before the US began levying tariffs against China. If the potential trade deal goes into a second year and all tariffs are removed, China could increase its purchases to between $40 billion and $50 billion, Bloomberg found.

China has already begun to lay the groundwork for the first phase of the trade deal, by issuing waivers for 10 million tons of soybean purchases this week. China is also considering waivers for another 4 million to 5 million tons of grains including wheat, corn, and sorghum, according to the report.

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China and the US are in the midst of working out a phase-one trade agreement. In talks in Washington in October, the US agreed to pause further tariff hikes on thousands of products, and China agreed to increase agricultural purchases, as well as roll back some of its tariffs as part of the agreement.

Still, further talks will likely take place before any agreements are finalized. China had expressed that it wanted more discussions before any agreement was signed, and later said it expected the US to roll back tariffs on Chinese products as part of a final trade agreement.

Farmers, who have been caught in the middle of the US-China trade war, have said they're skeptical of the partial deal. This is due to the lack of details about the timeline, prices, and commodities involved. Soybean farmers, for example, have been hit hard over the 19-month trade dispute, as it's dragged down prices and exports of soybeans significantly.

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