USDA’s Foreign Agricultural Service on Monday confirmed a sale of 612,000 metric tons of U.S. soybeans to China for the 2018-19 marketing year. It’s the first confirmation of a sale since Chinese Vice Premier Liu He pledged last week that the country would buy another 5 million tons as a sign of good faith as the two countries work to end a trade war that all but shut down U.S. shipments of farm commodities to the communist country.
China first resumed its soybean purchases from the U.S. in December, following a meeting between President Donald Trump and Chinese President Xi Jinping in Buenos Aires. Stalled negotiations also resumed after that meeting, resulting in a U.S. trade team flying to Beijing and then another negotiating round in Washington last week.
China purchased about 36 million tons of U.S. soybeans in 2017 before the trade war erupted between the two countries. The U.S. has been exporting a lot more soybeans to Europe and elsewhere during the trade war, that has resulted in Chinese tariffs on virtually all U.S. agriculture commodities.
Market analysts in Chicago say Chinese buyers have already contracted between 1 and 2.5 million tons of U.S. soybeans in recent days.
The new pledge last week to buy soybeans — despite the 25 percent tariff on the U.S. oilseeds — was largely ancillary to the overall talks in which the U.S. is demanding that China stop appropriating U.S. intellectual property, reduce support for state-owned enterprises and remove tariff and non-tariff trade barriers. U.S. Trade Representative Robert Lighthizer and Ag Secretary Sonny Perdue said substantial progress was made in the talks last week, but much more needs to be done.
But Trump was optimistic in an interview on CBS’s Face the Nation this weekend.
“It looks like we're doing very well with making a deal with China,” he said. “I can tell you this, no two leaders of this country and China have ever been closer than I am with President Xi. We have a good chance to make a deal.”
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