Archive for ‘soybeans’

02/03/2019

Trump asks China to lift tariffs on U.S. farm products

WASHINGTON (Reuters) – U.S. President Donald Trump said he had asked China to immediately remove all tariffs on U.S. agricultural products because trade talks were progressing well.

He also delayed plans to impose 25 percent tariffs on Chinese goods on Friday, as previously scheduled.
“I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.) based on the fact that we are moving along nicely with Trade discussions,” Trump said on Twitter, pointing out that he had not raised tariffs on Chinese goods to 25 percent from 10 percent on March 1 as planned.
“This is very important for our great farmers – and me!” Trump said.
Farmers are a key constituency for Trump’s Republican Party, and the U.S. president’s trade war with China has had a heavy impact on them. Beijing imposed tariffs last year on imports of soybeans, grain sorghum, pork and other items, slashing shipments of American farm products to China.
U.S. Agriculture Secretary Sonny Perdue said this week that U.S. trade negotiators had asked China to reduce tariffs on U.S. ethanol, but it was not immediately clear whether Beijing was willing to oblige.
Trump’s post on Twitter came several hours after the U.S. Trade Representative’s office said that it would delay the scheduled hike in tariffs on $200 billion worth of Chinese goods.

The notice, due to be published in the Federal Register next Tuesday, says it is “no longer appropriate” to raise the rates because of progress in negotiations since December 2018. The tariff would remain “at 10 percent until further notice.”

In a statement on Saturday, China said it welcomed the delay.

Speaking at a separate briefing in Beijing, a Chinese government official said both countries were working on the next steps, though he gave no details.

“China and the United States reaching a mutually-beneficial, win-win agreement as soon as possible is not only good for the two countries, but is also good news for the world economy,” said Guo Weimin, spokesman for the high profile but largely ceremonial advisory body to China’s parliament.

A tariff increase to 25 percent from 10 percent was initially scheduled for Jan. 1, but after productive conversations with Chinese President Xi Jinping, the Trump administration issued a 90-day extension of that deadline.

Trump had said on Sunday he would again delay the increase because of progress in the talks.

Source: Reuters

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23/02/2019

Trump says he’s inclined to extend China trade deadline and meet Xi soon

WASHINGTON (Reuters) – President Donald Trump said on Friday there was “a very good chance” the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.

“I think that we both feel there’s a very good chance a deal will happen,” Trump said.

Liu agreed there had been “great progress”.

“From China, we believe that (it) is very likely that it will happen and we hope that ultimately we’ll have a deal. And the Chinese side is ready to make our utmost effort,” he said at the White House.

The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.

 

Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. [.N] [O/R]

CURRENCY AGREEMENT

Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China’s yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.

Announcement of a pact aimed at limiting yuan depreciation was putting “the currency cart before the trade horse,” but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

“How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?” Ruskin asked in a note to clients.

In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.

Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.

The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.

Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

MEMORANDUMS NO MORE

Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.

“I don’t like MOUs because they don’t mean anything,” Trump said. “Either you are going to make a deal or you’re not.”

Lighthizer responded testily that MOUs were binding, but that he would never use the term again.

Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.

Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.

Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made “a lot of progress” on the issue, but did not elaborate.

The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.

The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.

China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.

China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a “show of good faith by the Chinese” and “indications of more good news to come,” Perdue wrote.

China was the top buyer of U.S. soybeans before the trade war, but Beijing’s retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.

Source: Reuters

14/12/2018

China buys US soybeans for first time since trade war

Soybeans coming thru siloImage copyrightREUTERS
Image captionChina’s purchase of 1.13 million tonnes of US soybeans has been hailed as a wonderful, great step by US officials.

China has bought US soybeans for the first time since the trade war between the two countries started in July – a move hailed as a “great step” by US officials.

One of the biggest casualties of the US-China trade war has been the US soybean sector.

China is by far the world’s biggest importer of soybeans.

And Beijing’s high tariffs placed on US soybeans this year has been severely hurting US farmers.

A trade truce between China and the US was reached earlier this month however, and there had been much anticipation that China would soon return to the US soybean market.

But while China’s purchase of 1.13 million tonnes of US soybeans on Thursday was met with much applause from some, others said the purchase was too small, and not a sign that the trade war was cooling.

“Having a million, million-and-a-half tonnes is great, it’s wonderful, it’s a great step,” said Steve Censky deputy secretary of the US Department of Agriculture.

“But there needs to be a lot more as well, especially if you consider it in a normal, typical year, we’ll be selling 30 to 35 million metric tonnes to China.”

The sale also failed to excite traders, who said the numbers fell short of estimates, which saw a sell-off in soybean futures.

“It’s a start, but it’s not nearly enough to fix our problems in regards to soybeans and a soybean oversupply in this country,” said Joe Vaclavik, president of Standard Grain, a Tennessee-based brokerage.

Why do soybeans matter?

In 2017, soybeans were the single biggest US agricultural export to China, which accounts for some 60% of the global trade in the commodity.

And soybeans are vitally important to China because they use the product to feed livestock.

The key supplier globally is Brazil, but China has also relied heavily on the US for soybeans supplies – in part due to seasonality.

Bar chart for major soybean exporters

Chief economist Robert Carnell from ING Bank told the BBC that China’s purchase on Thursday was more about convenience than anything else.

“The simple fact is China needs a lot of soybeans and it’s been buying them from Brazil, not the US,” he said.

“But Brazil could never supply all the soybeans China needed, so ultimately [China has] been driven back to US soybeans. And I think it’s just convenient for them to do that right now.”

Mr Carnell said that the recent arrest of Meng Wanzhou, Huawei’s chief financial officer and deputy chair, was far more indicative of where the trade war between the US and China was really up to.

“[It’s] a battle for technology, a battle for 5G,” he said. “In particular, Huawei has become one of the world’s biggest suppliers of telecoms technology – and the US doesn’t really like that.

“[So that arrest] is giving you a much better, a much clearer message on where the trade war lines in the sand are really being drawn.”

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