There has been some positive progress with regard to China, tariffs and agricultural exports. Leading up to the latest round of talks, China lifted tariffs on U.S. sorghum and the U.S. eased sanctions on the Chinese telecom equipment maker ZTE Corp., allowing the company to stay in business.
In late May the U.S. and China issued a joint statement indicating that both “agreed on meaningful increases in United States agriculture and energy exports” bringing some temporary relief to ongoing trade dispute concerns. Experts estimate a potential increase of $60 to 90 billion in Chinese purchases of U.S. goods, largely agriculture and beef especially.
“To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States’ goods and services,” the White House said in a statement.
But reports that China has agreed to import large amounts of U.S. ag goods as part of a tentative framework deal to resolve a trade dispute between the nations have prompted some lawmakers from both parties to express concern about what kind of concessions the administration may be offering China. Larry Kudlow, Trump’s top economic advisor, told ABC that although there may be “perhaps some small changes around the edges” in U.S. action on ZTE, there will still be big fines and other remedies, and, he added, “do not expect ZTE to get off scot-free. It ain’t gonna happen.”
Earlier in May, Bunge, the world’s largest oilseed producer, told Bloomberg News that China had essentially stopped buying U.S. soybeans and instead was purchasing soybeans mostly from Brazil. U.S. soybean sales to China are down compared to last year’s total, according to the U.S. Department of Agriculture.
In recent years, China’s demand for soybeans has been strong. China is the second-largest market for U.S. agricultural exports, and the country is Ohio’s most important soybean export market. In 2017, soybeans were Ohio’s largest agricultural export, totaling $1.8 billion.
“China picked a commodity that would do maximum damage to U.S. agriculture and could do political damage to the administration,” said Ian Sheldon, an agricultural economist, who serves as the Andersons Chair in Agricultural Marketing, Trade and Policy with The Ohio State University’s College of Food, Agricultural, and Environmental Sciences.
In April, China threatened to impose a 25% tariff on U.S. soybeans and tariffs on 105 other American products. That was in response to the tariffs that the administration proposed on a range of Chinese imports valued at $50 billion.