China Prepares to Buy Soybeans Again

Chinese officials last week prepared to restart imports of U.S. soybeans and liquefied natural gas, the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start buying some U.S. products immediately.

Chinese officials have been directed to take necessary steps for the purchases, according to officials with knowledge of the discussions. It wasn’t clear whether the preparations meant China would cut the retaliatory tariffs it imposed on those products, or when the purchases would happen.

Chinese imports of American soybeans fell 95 percent in October compared to last year, damaging the prospects of Midwest farmers who are in the middle of harvest. Even if the tariffs are lifted now, the U.S. crop is becoming less competitive in the Chinese market as the harvest season approaches in South America.

Chinese purchase of soybeans collapsed after Beijing imposed tariffs on them in retaliation for U.S. import taxes. The two nations have agreed to temporarily halt the spiraling exchange of tariffs, promising to try and iron out their differences by March 1. If they do not reach an agreement by then, the 10 percent tariff the U.S. has imposed on about $200 billion of goods from China may increase to 25 percent, a move that was scheduled for January 1.

Source: Bloomberg