China to stop buying US agricultural products
August 09, 2019
China will stop buying US agricultural products in response to US President Donald Trump’s announcement on 1 August that he would impose new 10% tariffs on US$300bn worth of Chinese imports, starting on 1 September.
A spokesperson for the Chinese Ministry of Commerce announced the retaliatory measure on 5 August, saying the US move was “a serious violation of the [31 July] meeting between the heads of state of China and the United States”, according to a CNBC report.
The department also said it would “not rule out” tariffs on newly purchased agricultural goods after 3 August and would also consider imposing tariffs on US agricultural products that China had already bought.
The announcements come in the wake of news that a private Chinese company had bought 68,000 tonnes of US soyabeans in the week ending 25 July, the first new soya purchase since a 544,000 tonne sale to a government buyer in June.
It was also the first purchase since China offered in July to exempt five domestic crushers from its 25% import tariffs on US soyabeans, according to a 2 August World Grain report.
China and the USA have been locked in a trade war since US President Donald Trump imposed 25% tariffs on US$200bn of Chinese goods in July 2018. In retaliation, China increased levies on a wide range of products worth billions of dollars imported from the USA.
World Grain said China’s purchases of US soyabeans were at an 11-year low. The USA had traditionally been the biggest supplier of soyabeans to China, which was expected to import 87M tonnes of the oilseed over the 2019/20 marketing year.
China’s largest grain and food company, COFCO International, is planning to buy more Brazilian soyabeans as trade tensions with the USA continue.
COFCO chairman Johnny Chi told the Brazilian Agribusiness Congress that the state-owned company would buy 5% more soyabeans each year from Brazil over the next five years and finance the expansion of more than 24M ha of soyabean production in Brazil, World Grain reported on 6 August.
US and Chinese negotiators are due to meet again in September.