China Buys US Agricultural Goods to Keep Trade Talks Positive

American farming families can sleep easier at night knowing Chinese importers have begun again to make more purchases of US agricultural products, including major shipments of soybeans, cotton, pork and sorghum. It’s soon expected that there will be further orders for American-grown wheat, corn and wheat.

US agriculture was hit hard by current tensions in China-US trade talks, since US President Donald J. Trump had raised tariffs on Chinese imports starting last year and Beijing had responded with its own punitive measures by restricting access of US soybeans and other agriculture to Chinese markets.

The actions were devastating, since China stood as one of the largest foreign buyers of US agriculture. Hence, American farmers had struggled to find alternative customers, which had resulted in huge loads of soybeans already harvested going to waste on the fields and with overloaded inventories. Meanwhile, soybean prices crashed and many US farmers had lost large sums of money, placing their financial security in grave danger.

And when President Trump had broken the trade truce with Chinese President Xi Jinping last May it seemed that US soybean farmers were headed for dire circumstances in the foreseeable future.

Fortunately in a gesture of good faith, President Xi granted permission for the Commerce Ministry to purchase half a million tons of soybeans from the US Department of Agriculture (USDA) on June 29, a day before he was scheduled to meet President Trump face-to-face at a closed door meeting on the sidelines of the 2019 G20 Leaders’ Summit in Osaka, Japan.

The action helped to secure a successful meeting between the world’s two most powerful leaders and they had agreed to return to a trade truce as the two nations secured an arrangement not to raise future tariffs against each other. But Beijing has reiterated that the US agriculture purchases should not be misunderstood.

The act of goodwill should not be viewed as a sign of weakness, since high-level trade consultations have resumed on Tuesday in Shanghai. Washington can not assume that Beijing is begging for a trade deal with the US, which could be lopsided and harmful to China’s national self interests.

The focus on bilateral trade talks should be about both signs supporting a win-win trade agreement that President Xi and President Trump would take pride in signing at a later date. A fair and balanced trade document can boost the economies of the US and China as they would enter a new era of mutual trust, willing partnerships and equal status on the diplomatic front.

American farmers can become major beneficiaries if President Xi and President Trump can come to terms on a trade deal. China has well over 1.4 billion people and fewer Chinese are staying on their farms as younger generations have migrated to cities in search of better jobs and opportunities. Consequently, the nation’s Middle Class is increasing in numbers and prosperity.

The rise of China’s Middle Class with urbanization taking a firm foothold in the country have resulted in much higher demand for US agricultural imports, especially soybeans, dairy and meat products. Plus you can expect US-based oil and gas exporters to enjoy outstanding opportunities, since China has emerged as the world’s largest energy consumer as well.

Beijing is demonstrating strong faith that US trade officials will conclude it’s in Washington’s best interests to endorse a trade agreement with China, which explains why Chinese purchases of US agriculture goods have started up last week. Beijing also hopes Washington will return the favor by honoring its prior commitments in trade talks.

China-US relations have experienced dramatic highs and lows but the two nations support peace and prosperity for our world. They are not enemies and do not wish to wage wars against each other. But just like brothers they do bicker at times and that should not be cause for concern. Sometimes a deeper friendship can be forged by a dispute as the two sides overcome mutual mistrust to reach crucial agreements, which can endear a stronger bond.

Beijing and Washington are strong powers and they expect respect from each other. By supporting a framework of negotiating as equal partners that could pave the path for a winning bilateral trade agreement, which could bring more happiness and good fortunes for many Americans and Chinese.

US farmers and ranchers can get back to business at hand and supply more food for China in the meantime.




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