China is balking at President Trump’s demand that Beijing commit to doubling imports of US agricultural and the issue has become a roadblock to ending the trade war between the countries with the world’s two largest economies, a report said Wednesday.
Trump has said publicly that China could buy as much as $50 billion of US farm products, more than double the annual amount it did the year before the trade war started.
US officials continue to push for that in talks, while Beijing does not want to commit to a large figure or specific time frame, with Chinese buyers wanting to base their decisions on market conditions, Reuters reported.
“China does not want to buy a lot of products that people here don’t need or to buy something at a time when it is not in demand,” an official from a Chinese state-owned company explained.
If US agricultural products “enter China in a concentrated way, it might be hard for the domestic market to digest,” the official added.
Oversupply of agricultural products in China would hit local prices really hard, he said, “and break the supply-demand balance.”
And a massive outbreak of African swine fever has decimated the pig herd in China, battering demand for soybeans, a key feed ingredient and the biggest agricultural import from the US.
Chinese agricultural buyers, representing a mix of state and private enterprise, typically import from the cheapest source.
The US demand that China commit to buying a huge volume of products, regardless of whether they were economical or in demand, would require state intervention.
And that contradicts Team Trump’s push for China to become a more market-based economy and stop subsidizing state companies and favoring local firms at the expense of foreign competitors.
“The US government doesn’t normally regulate the pricing or timing of ag exports — a private-sector role — but in this case the president has already taken this step,” said Miriam Sapiro, former acting US Trade Representative under President Barack Obama and an adviser to President Bill Clinton who is now managing director at Sard Verbinnen, a communications company.
“It is ironic that China is pushing back, saying, ‘We want the market to address this,’” said Nicole Lamb-Hale, a former assistant secretary of commerce and a managing director at Kroll, a risk management firm.
The hefty agricultural purchases Trump is asking for would distort markets, Lamb-Hale said.
China is telling Trump they are “just not feasible.”
Asked specifically about concerns that the administration’s push for big agricultural buys contradicts the longer-standing US free trade message, a White House spokesman said: “The president has been clear that he wants real structural changes that yield actual, verifiable, and enforceable results, leading to fairer trade, more efficient markets, and increased prosperity for both countries.”
Commerce ministry spokesman Gao Feng told reporters on Oct. 17 that China would “increase US farm purchases based on domestic demand and market principles, while the US would provide favorable conditions.”
US farmers watched their exports plummet after the trade war started, and the administration has earmarked $28 billion to date to bail them out.
An administration official said Tuesday that the two sides might not agree to a “Phase One” deal by the Asia Pacific Economic Cooperation meeting in Chile, which had been scheduled for mid-November.
But the country’s president, Sebastián Piñeram, canceled the meeting because of massive civil unrest and violence sweeping the country, South America’s wealthiest.
In recent weeks, China has purchased large amounts of soybeans from Brazil, after prices of US soybeans jumped as investors bet on big China buys.
With Post wires