Monday, October 14, 2019

Deja vu: U.S. trade negotiators agree to hold off on tariffs as China promises to buy more American farm products

China has again promised to buy more American farm products while U.S. trade negotiators have again said that, in return, they will hold off on a planned tariff increase on imported Chinese goods, William Mauldin, Chao Deng and Vivian Salama report for The Wall Street Journal.

President Trump said the Chinese agreed to buy between $40 billion and $50 billion in American agricultural goods, though "he has in the past promised trade talk breakthroughs that did not materialize," The Washington Post's David Lynch notes.

China recently boosted purchases of U.S. farm products in anticipation of a deal, but has much ground to make up: U.S. soybean sales to China fell from $12.2 billion to $3.1 billion in the past year.

"The two sides left many details to be worked out in the weeks or months ahead on tough issues including China’s enforcement of intellectual property rules, U.S. access to Chinese markets, Chinese government support for state-owned enterprises, and the fate of U.S. tariffs on nearly $360 billion worth of Chinese imports already in place," the WSJ reports. "The planned tariff increases in December on electronics, apparel and other imported consumer goods—a big uncertainty for many U.S. firms—haven’t been shelved so far, Mr. Trump’s trade adviser, Robert Lighthizer, said."

President Trump said on Twitter that the U.S. had reached a “very substantial phase-one deal” worth $50 billion in agricultural sales to China, but Bloomberg News reports, "China wants to hold more talks to hammer out the details . . . before Xi Jinping agrees to sign it."

Darin Friedrichs, senior Asia commodity analyst at brokerage INTL FCStone in Shanghai, told Dominique Patton of Reuters, "I think it's a meaningless big number, thrown out to get headlines, and won't happen." Patton reports, "Boosting purchases so substantially will depend on further progress on other, more thorny, issues still to be dealt with in the talks, said Friedrichs and others."
Grace Shao of CNBC reports, "Chinese state media appeared cautious about celebrating" the deal.

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