October 25, 2019
Reuters cites unnamed U.S. sources who say China wants planned taxes for December 15th rolled back and a stop to those put in place on September 1st. Trade negotiators met today via phone to discuss the ‘phase one deal.’ One source says China’s farm purchases will start at around $20 billion annually. A Bloomberg report made similar claims on Thursday.
The source also says the purchases could rise over time, but would depend on market conditions and pricing. Meanwhile, Vice President Mike Pence delivered a closely watched speech in Washington on Thursday.
Pence stated “We are not seeking to contain China’s development. We want a constructive relationship with China’s leaders, like we have enjoyed for generations with China’s people. And, if China will step forward and seize this unique moment in history to start anew by ending the trade practices that have taken advantage of the American people for far too long, I know President Donald Trump is ready and willing to begin that new future.”
President Donald Trump and Chinese President XI could nail down details for a ‘phase one’ deal during the A-PEC Summit kicking off November 16th.
As trade tensions with China remain unresolved, U.S. producers continue to bear the brunt of retaliatory tariffs. Lorenda Overman is a soy and hog farmer. On her operation, the soybean tariff has resulted in a loss of $1.50 – $2.00 per bushel, which spells a substantial loss of $105,000 – $140,000 in total for their soybean harvest. For hogs, the integrator they sell to will be taking the hit in 2019 but will be passing it down to the Overman farm in 2020.
China imported $9.1 billion of U.S. farm products in 2018 while exports in the first half of 2019 sank to $1.3 billion.